HC rules on minimum shareholding today

The High Court will deliver a verdict today on the writ petitions filed by sponsors and directors of listed companies against mandatory shareholding rules set by the Securities and Exchange Commission (SEC).
The SEC directive mandates 30 percent shareholdings jointly by sponsors and directors and 2 percent by individual directors.
The bench of Justice Farid Ahmed and Justice Sheikh Hassan Arif yesterday fixed the verdict date after concluding a hearing on the SEC rules.
The court earlier asked the government and the SEC to explain why the mandatory shareholding rules should not be declared illegal.
“The Securities and Exchange Commission issued the directive to keep the market stable and to stop manipulation in the market,” said Attorney General Mahbubey Alam.
The rules should be continued for the interest of the market, Alam said.
Directors or sponsors will not be interested in their firms if they do not hold a minimum portion of shares of the companies.
The directors and sponsors manipulated the market by using price sensitive information and made hefty profits through selling of shares in the overheated market, said Barrister Tania Amir, a lawyer for Dhaka Stock Exchange, while presenting her arguments in court.
She urged the court to give direction to the SEC to take action against manipulators.
The SEC took the perfect decision at the last time to save the interest of general investors, said Barrister Fazle Noor Taposh, a lawyer for small investors.
He said the court should support the small investors as most of the manipulators laundered money abroad.
Barrister Rafique-ul Huq, Barrister Fida M Kamal and Dr M Zahir presented arguments in court for the writ petitioners.
Barrister Rokanuddin Mahmud, a lawyer for Mercantile Bank Chairman Abdul Jalil, filed a writ petition with the court against the SEC directive yesterday.
Earlier, the SEC on November 22 issued a directive for mandatory shareholding for listed company directors to comply with the rules by May 21.
The SEC rule was issued following widespread allegations that the listed company directors bagged huge profits by selling the majority of their shares during the 2010 market bubble.