The Bangladesh Securities and Exchange Commission (BSEC) on Thursday (19 September) appointed two new independent directors to the Dhaka Stock Exchange (DSE) board, replacing previous appointees who could not assume their roles due to a dispute.
The newly appointed independent directors are Mominul Islam, founder of Clink Advisory and former managing director of IPDC Finance, and Shahnaz Sultana, CEO and chief consultant of FINS Alliance.
They will replace AF Nesaruddin, a partner at Hoda Vasi Chowdhury & Co, and Syeda Zakerin Bakht Nasir, chief consultant and CEO of ZN Consultants. Earlier, AF Nesaruddin and Syeda Zakerin Bakht Nasir had replaced KAM Majedur Rahman and Helal Uddin.
Previously, DSE shareholders had raised concerns about the BSEC appointing independent directors twice, which led to doubts about transparency and compliance with DSE and BSEC guidelines.
According to the DSE’s Board and Administration Regulations, individuals with a direct or indirect business relationship with the stock exchange within the past three years cannot be appointed as independent directors. This includes business partners and major shareholders of associated entities.
Additionally, the regulations disqualify anyone who has received payment from the stock exchange in the last three years.
Despite these rules, BSEC appointed AF Nesaruddin, whose firm, Hoda Vasi Chowdhury & Co, was appointed as DSE’s auditor on 21 December 2023, and their auditing work for the fiscal 2023-24 is ongoing.
Similarly, Syeda Zakerin Bakht Nasir provided consulting services for the DSE from December 2020 to mid-2022, and her report has yet to be reviewed by the DSE board.
These appointments seem to contradict regulations regarding eligibility for independent directors, as both individuals have had recent business ties with the DSE.
On 2 September, BSEC appointed seven independent directors to the DSE board, two of whom were questioned.
Consequently, they were unable to assume their roles. Specifically, concerns were raised about the appointments of KAM Majedur Rahman, a former managing director of the bourse, and Nahid Hossain, an additional secretary at the Financial Institutions Division.
A group of shareholders noted that KAM Majedur Rahman served as a director at AK Khan Securities from December 2020 to 4 October 2022 and is currently the CEO of AK Khan & Company Ltd, the owner of AK Khan Securities. They also argued that Nahid Hossain’s role as an additional secretary in the Financial Institutions Division, a government body with regulatory functions, should disqualify him from being an independent director.
The BSEC, however, clarified that Majedur Rahman was a nominee director at AK Khan Securities, which exempts him from the restrictions outlined in the regulations. They also stated that the Financial Institutions Division does not function as a regulatory body, and therefore Nahid Hossain’s eligibility remains unaffected.
The demutualised DSE has 13 board seats: four for shareholder directors, one for the strategic investor, one for the managing director, and seven for independent directors, who are recommended by the DSE NRC and approved by the BSEC.
