Casual vacancy of directorships on 2pc share
Directors of pending writ indecisive

Mohammad Ali

Some sponsors-directors, who earlier obtained a High Court (HC) rule regarding casual vacancy of their posts due to failure to comply with SEC's 2.0 per cent share holding directive, remained indecisive about moving ahead with this legal matter.

Sources said that the securities regulator in a writ petition on May 14, 2012 was asked to justify its notification regarding why failure of holding of minimum 2.0 per cent share by the sponsors-directors causes casual vacancy of their directorship.

Three directors of Social Islami Bank Ltd filed the writ petition. Following the writ, the HC bench asked the SEC Chairman to explain as to why the SEC's notifications issued on November 22 and December 7, 2011 under purported authority of Section 2CC of SEC Ordinance would not be declared unlawful.

The court also wanted to know as to why the Section 2CC would not be declared ultra-vires Articles 27, 31, 40 and 42 of the Constitution, lawyer concerned said.

The HC bench comprising Justice Md Ashfaqul Islam and and Justice Mustafa Zaman Islam issued the rule to comply it within two weeks.

The two-week deadline has already been passed over one month ago. In the meantime-on May 21 and June 21- two separate HC benches in two judgments rejected three and five separate writ petitions filed challenging legality of the SEC's notification and constitutionality of section 2CC of the ordinance respectively.

A source closed to the petitioners told the FE that they are now in indecision about going forward with their writ petition and they didn't further instruct their lawyer in this connection.

No initiative from the petitioners was seen in the concerned court to hold hearing on the HC rule, resulting no hearing on the matter till now, the source said.

Advocate Ahsanul Karim, petitioners' counsel, earlier told the FE his submission before the court was that as the SEC gives consent to a particular company and later can impose some other conditions to that company, not any individual, if it wants. Consecutively, consequences of disobeying the conditions will fall upon that particular company, not any individual, he added.

However, after the two verdicts passed in favour of the Securities and Exchange Commission (SEC), the stock market regulator moved to materialise its November 2011 notification that failure of mandatory holding of 2.0 per cent share by the listed companies' sponsors-directors causes casual vacancy of their directorships.