Dhaka, Bangladesh (BBN)-The High Court Wednesday declared illegal the much-talked-about securities regulators’ notification on mandatory holding of 2.0 percent shares by the listed companies’ sponsor-directors.
The HC came with the judgement in response to a writ petition filed by a listed bank’s sponsor shareholder.
Following the judgment, the sponsor-directors no longer need to hold minimum 2.0 percent or 5.0 percent shares of the listed companies paid up capital to continue their directorship as per clauses “d” and “f” of the notification.
The Bangladesh Securities and Exchange Commission (BSEC) issued the notification to hold mandatory 2.0pc share on November 22 in 2011.
Mentioning the delegation of power in the Section 2CC of the Securities and Exchange Ordinance-1969, under which the BSEC issued this notification, the HC posed a question on whether the parliament can delegate its own enactment power to any other body to enact legislation citing an example of the Irish Parliament, which adopted resolution that Parliament cannot delegate its own legislative power to any other authority.
The HC bench of Justice Dr Quazi Reza-Ul Hoque and Justice ABM Altaf Hossain passed the judgment.
Earlier in May, 2012, a number of writ petitions, filed by a section of the sponsor-shareholders challenging the BSEC’s notifications, were rejected by a HC bench.
In December of 2012, another writ on the same issue was also rejected.
However, another part of the notification on jointly holding 30 percent company share by the sponsor-directors remains unchallenged.