Mixed reactions to HC verdict on 2 pc rule

Market stakeholders have had mixed reactions to the High Court (HC) verdict that struck down the requirement for sponsor-directors to hold 2 per cent share in their listed companies. Private investors are saying they will be hit by this decision while others believe there will be no adverse impacts on the market. Securities and Exchange Commission (SEC) issued the order that sponsor-directors of every listed company must hold a minimum share of two per cent. The directive was part of a raft of government measures following a share market collapse in 2011. The HC declared the rule illegal after hearing a writ petition against it on Wednesday. Mizanur Rashid Chowdhury, the president of the investors’ association, said this ruling would hurt small investors. However, Yawer Sayeed, the head of asset management firm, AIMS, said he believed the HC ruling would not adversely impact the market. He said the 2 per cent rule was problematic. According to the Dhaka Stock Exchange, after May 2012, 235 directors in 209 listed companies held less than two per cent share in their companies, according to bdnews24.com.