The securities regulator on Sunday gave approval to change the asset manager of two closed-end mutual funds as demanded by more than two-third unit holders.
The mutual funds are DBH First Mutual Fund and Green Delta Mutual Fund.
The approval came on Sunday at a meeting held at the office of the Bangladesh Securities and Exchange Commission (BSEC) chaired by its chairman Prof. M Khairul Hossain.
The securities regulator appointed IDLC Asset Management Company Ltd as new asset manager to the two mutual funds, replacing LR Global Bangladesh, in line with the majority unit holders' demand and application of Bangladesh General Insurance Company (BGIC), the trustee of both the mutual funds, BSEC said in a statement.
Around 72.75 per cent of unit holders of DBH First MF and 70.10 per cent of those of Green Delta MF demanded for appointing IDLC Asset Management Company as asset manager replacing LR Global Bangladesh, according to the BSEC statement.
The BSEC has changed the asset manager as per the Section 31 of the Securities and Exchange Commission (Mutual Fund) Rules, 2001, the BSEC statement said.
According to the rules, the trustee can change the appointment of an asset manager following the demand of two-third (66.67 per cent) unit holders, subject to prior approval of the commission.
Earlier, the LR Global filed a writ petition with the High Court, seeking an order to stop its removal attempt as the asset manager of two closed-end mutual funds.
The High Court (HC) on November 7 directed all parties concerned to maintain the status quo regarding the asset manager of the two MFs until January 8, 2020.
On December 1, the Chamber Judge of the Appellate Division upheld the Chamber Judge's stay order on the 'status quo' regarding the asset manager of Green Delta Mutual Fund and DBH 1st Mutual Fund.
Meanwhile, the Supreme Court (SC) has recently stayed the status quo which barred the regulator from changing the asset manager.
The unit holders, who appealed to change the asset manager, submitted their lawyer's certificate copy on the SC's order to the BSEC.
Then the securities regulator decided to take their lawyer's opinion in a bid to further be sure about the lawyer's certificate issued on the stay order of the SC.
"The verdict of the SC is above all. So, the BSEC does not need any legal opinion in this regard. Nevertheless, I will say in my opinion that the BSEC has no bar to take any action in line with the securities rules," Advocate Probir Niogi, a lawyer of BSEC, told the FE recently.
The BSEC lawyer said the regulator has no bar for taking action as both the Chamber Judge and the SC have stayed the HC's status quo.
Closed-end mutual funds are investment tools that pool a fixed amount of money for a certain period from investors and re-invest it into stocks, bonds and other assets.
A unit of DBH First Mutual Fund and Green Delta Mutual Fund closed at Tk 8.30 and Tk 7.60 respectively on the Dhaka Stock Exchange on Sunday.
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