BSEC picks 13 IT firms for conducting online general meetings

The Bangladesh Securities and Exchange Commission (BSEC) has established a pool of independent service providers (ISPs) to ensure accountability and transparency in the general meetings of listed companies.

According to the commission, companies must hire from among the 13 ISPs approved by the regulator to conduct their annual general meetings (AGMs) and extraordinary general meetings (EGMs) either in a hybrid format – both physically and digitally – or solely digitally.

During the Covid-19 pandemic, the BSEC permitted companies to hold their general meetings using a hybrid system as an alternative measure to avoid large gatherings and reduce the risk of spreading infections.

However, some listed companies violated this directive by exclusively using digital platforms.

BSEC officials emphasised the commission’s focus on ensuring proper investor participation in general meetings, which is crucial for reflecting their opinions effectively.

There have been complaints that some online meetings did not ensure sufficient participation or adequately reflect investors’ opinions. As a result, the commission intends to rigorously oversee company meetings, according to sources.

In February, the regulator sought expressions of interest for enlistment in the independent service providers’ panel to provide digital platform services. Sources at the BSEC report that approximately 37 firms have applied to join the panel thus far.

The pool of ISPs

Out of the finalised 13 ISPs, eight have already received approval from the BSEC to conduct AGMs and EGMs, while the other five will be registered after meeting certain conditions set by the commission.

The eight ISPs approved are: Satcom IT, Comjagat Technologies, United Corporate Advisory, Encoders InfoTech, Janos Sofsys Engineering, Luxury IT Solutions, ABC Bangladesh, and HiSoft Corporation.

The remaining ISPs are: Synesis IT, Computer Network Systems (CNS), Orange Business Development, Shenzhen Kingdom Sci-Tech Company, and Project2Morrow Consulting Services. These IT firms are required to develop the necessary software and platforms and demonstrate them to the commission.

To be enlisted, the five IT firms need registration from the commission and will have to pay a consent fee of Tk5 lakh and an annual registration renewal fee of Tk1 lakh, as specified in the BSEC letter.

Good firms enjoy relaxation

While the BSEC has been preparing to enforce strict monitoring of general meetings through a hybrid mechanism, it has relaxed rules for compliant companies in the A category.

According to a BSEC letter issued in May, companies that have maintained an A category status for five consecutive years are allowed to conduct meetings entirely on digital platforms.

Currently, out of the total 376 listed firms (excluding mutual funds, debentures, and government Treasury bills and bonds), 235 companies are in the A category. Companies in the A category are those that have paid over 10% dividends annually, either in cash or stock.

Those paying less than 10% dividends are categorised as B, while those non-compliant with securities rules and laws are downgraded to the Z category, according to the DSE. Currently, there are 56 stocks in the Z category and 102 in the B category at the DSE.

A BSEC official previously noted that while some companies conducted general meetings through the digital system, investor rights were not properly ensured – such as voting rights and other issues – resulting in non-compliance with directives.

They further stated, “Previously, companies could hire service providers of their choice in the absence of a panel, which raised concerns about potentially misleading meeting data through later edits. Therefore, going forward, the commission will ensure accurate information about company meetings.”

In December last year, the BSEC mandated the physical presence of at least 25% of board members, including the chairman and managing director, at general meetings of listed companies to enhance accountability to shareholders.

BSEC rejects Mir Akhter and Sena Kalyan Insurance’s application 

Mir Akhter Hossain Ltd and Sena Kalyan Insurance Company, both listed in 2021, applied to the commission seeking permission to hold meetings exclusively through digital platforms.

However, the commission has declined their requests, stating that it is not currently in a position to permit general meetings to be conducted solely via digital platforms.