Two sections of Demutualisation Act, 2013 challenged

The High Court (HC) has issued a rule as to why two sections of the Exchanges Demutualisation Act, 2013 shall not be declared illegal, officials said.
The court has issued the rule following a writ petition filed by a member of Dhaka Stock Exchange (DSE) Faisal Kabir Chowdhury who has not yet received his eligible amount of shares of the demutualised exchange.
The Ministry of Finance (MoF), the securities regulator and the chief executive officer and the secretary of the premier bourse have been made the respondents of the writ petition.
The DSE Thursday received the court order which asked the respondents to explain as to why two sections of the Exchanges Demutualisation Act, 2013 cannot be declared illegal by March 17, 2014.
Two sections, which have been challenged in the HC, speak for the disbursement of exchange's shares into the BO (beneficiary owner's) or dealer account of a trec-holder or primary shareholder.
The section 8 (b) of the Exchanges Demutualisation Act, 2013 says, "Shares shall be allotted in dematerialised form in favor of primary shareholders and in no way the dematerialised shares can be rematerialized."
The section 12 (1) (a) says, "Except for shares preserved temporarily in blocked accounts, shares owned collectively by trec-holders and others associated with them shall be not more than 40 per cent of their eligible amount of shares."
The DSE officials said, as per the section 12 (1) (a), their trec-holders have already received 40 per cent of their eligible amount of shares, which have been disbursed into the BO accounts opened against the respective companies.
"We have not said that Mr. Kabir's shares would not be allotted. But he had not opened company against his previous proprietorship and consequently no BO account was opened against the company," said a DSE official.
According to DSE officials, before the 2006 the DSE members have proprietorship and the securities regulator asked them to convert their proprietorships into separate companies by June 30, 2006 for the sake of renewing their licenses.
The members, other than the Al Faisal Securities, opened companies against their proprietorships.
"That's why the license of Mr. Faisal was not renewed. And he is yet to receive his shares as the section 8 (b) replaced the provision of paper shares," the DSE official said.
Mr. Faisal could not be received through the cell phone and land phone numbers mentioned in the profile of Al Faisal Securities on the DSE website.