HC extends stay order on mutual funds for 3 months
Monday, 17 November 2008
FE Report
The High Court (HC) extended the stay order for a period of about three months on the changes made by the capital market regulator in the rules for the close-end mutual funds, restricting them from issuing preemptive rights or bonus shares.
A HC division bench comprising Justice SM Hossain and Kamrul Islam issued the order following a writ petition recently filed by the three individual investors after expiry of previous three-month stay order.
On August 4, a HC division bench comprising justice Khademul Islam Chowdhury and Mashuque Hossain Ahmed issued the order following a writ petition filed by the individual investors -Ibrahim Akhand, Delwar Hossain and Raihana Haque -- challenging the amendments to the mutual fund rules. The Securities and Exchange Commission (SEC) approved the amendments on June 22 last.
Eminent lawyer Dr M Jahir and Barrister Shafiqur Rahman moved for the petitioners.
The court also directed all the listed 16 mutual funds, having a total issued paid-up capital of $45 million, not to declare any dividend until disposal of the rule.
On June 26 last, the securities regulator decided in principle to review the close-end mutual fund rules and, to give them a final shape. It sought opinions and recommendations from the members of the public.
Earlier on July 22 this year, the SEC formally approved the changes in mutual fund rules that barred the close-end mutual funds from offering bonus share as dividend or rights issues in a bid to increase their capital base.
Experts suggested setting up a separate permanent bench in the HC division to help speedy disposal of mounting number of cases involving the listed companies.
"An effective bench comprising justices having sufficient knowledge in securities market and listed companies would ensure early dispensation of justice, enhance liquidity flow and help build confidence among the investors in the country's flourishing capital market," a market expert said.
A number of countries, including neighbouring India, have separate Securities Appellate Tribunal to settle disputes over the issues of listed companies, he added.
Market sources said over 100 cases related to listed companies have remained pending with the country's different courts.
Investments worth over several billion taka have also remained stuck up due to non-settlement of the long-pending cases.
The Investment Corporation of Bangladesh (ICB) had to withdraw the record dates for entitlement of dividends it declared earlier for its unit fund shareholders due to the court injunction.
The High Court (HC) extended the stay order for a period of about three months on the changes made by the capital market regulator in the rules for the close-end mutual funds, restricting them from issuing preemptive rights or bonus shares.
A HC division bench comprising Justice SM Hossain and Kamrul Islam issued the order following a writ petition recently filed by the three individual investors after expiry of previous three-month stay order.
On August 4, a HC division bench comprising justice Khademul Islam Chowdhury and Mashuque Hossain Ahmed issued the order following a writ petition filed by the individual investors -Ibrahim Akhand, Delwar Hossain and Raihana Haque -- challenging the amendments to the mutual fund rules. The Securities and Exchange Commission (SEC) approved the amendments on June 22 last.
Eminent lawyer Dr M Jahir and Barrister Shafiqur Rahman moved for the petitioners.
The court also directed all the listed 16 mutual funds, having a total issued paid-up capital of $45 million, not to declare any dividend until disposal of the rule.
On June 26 last, the securities regulator decided in principle to review the close-end mutual fund rules and, to give them a final shape. It sought opinions and recommendations from the members of the public.
Earlier on July 22 this year, the SEC formally approved the changes in mutual fund rules that barred the close-end mutual funds from offering bonus share as dividend or rights issues in a bid to increase their capital base.
Experts suggested setting up a separate permanent bench in the HC division to help speedy disposal of mounting number of cases involving the listed companies.
"An effective bench comprising justices having sufficient knowledge in securities market and listed companies would ensure early dispensation of justice, enhance liquidity flow and help build confidence among the investors in the country's flourishing capital market," a market expert said.
A number of countries, including neighbouring India, have separate Securities Appellate Tribunal to settle disputes over the issues of listed companies, he added.
Market sources said over 100 cases related to listed companies have remained pending with the country's different courts.
Investments worth over several billion taka have also remained stuck up due to non-settlement of the long-pending cases.
The Investment Corporation of Bangladesh (ICB) had to withdraw the record dates for entitlement of dividends it declared earlier for its unit fund shareholders due to the court injunction.