Treasury moves ahead with board seats in listed cos.
View(s):The Treasury has asked the Securities and Exchange Commission (SEC) to implement a budget proposal allocating a board seat for any individual holding 10 per cent in a commercial bank or 15 per cent in a listed firm, a senior Treasury official said. ”We wrote to the SEC last month on this which is in line with the recent budget proposals, requesting them to implement it and we’re awaiting a reply,” he told the Business Times.
Currently there are no regulations governing board positions for those owning such stakes in listed companies. “It’s only by invitation by the board of directors that (such) shareholders can accommodate a board seat,” a corporate lawyer told the Business Times adding that this new law applies only to individuals and not companies/entities.
What the Treasury has requested for is targeted at board positions in listed firms, according to Treasury sources but they have also wanted it applied to licensed commercial banks (LCB) where stricter laws apply. Presently, under Section 12 of the Banking Act an individual, partnership or corporate body shall not either directly or indirectly or through a nominee or acting in concert with any other individual, partnership or corporate body acquire a material interest in LCB without the prior written approval of the Monetary Board (MB). The threshold limit in the Act is 10 per cent, but with MB’s permission they can go up to 15 per cent.
(Duruthu)