Beximco pulls out its director from Shipping Corporation

Infographics: TBS

The Bangladesh Export Import Company Limited, known as Beximco, has withdrawn its nominated director from the board of the Bangladesh Shipping Corporation — a publicly listed state-owned authority managing ocean-going vessels — following the fall of the Hasina-led government.

Beximco secured a seat and nominated Mostafa Zamanul Bahar as director to the board of the corporation in December 2022 after acquiring over a 5% stake from the secondary market, according to documents from the Shipping Corporation.

Now, Beximco, a concern of Beximco Group owned by Salman F Rahman, a former private sector adviser to ousted prime minister Sheikh Hasina, has withdrawn its nominated director, according to the corporation's latest annual report.

Confirming the matter, a senior official at the corporation, requesting anonymity, said following the ouster of the Hasina-led government in August this year, the Beximco-nominated director did not attend any meetings.

According to the Bangladesh Shipping Corporation Act 2017, the corporation can adopt at least two directors on its board from the shareholders.

To maintain the act, the corporation allowed Beximco's nominated director on its board as well as the directive of the stock market regulator.

The act said the corporation can elect a director, who holds over 20% of its total share but not more than 34%, and may elect two directors if any individual holds over 34% stake. 

The act also said to elect shareholders, the corporation has to comply with the rules of the Bangladesh Securities and Exchange Commission (BSEC).

To comply with the act and a notification issued in May 2019, the corporation allowed the Beximco representative on its board. 

In its annual report for the fiscal year 2023-24 published recently, the Shipping Corporation said its board of directors is comprised of the minister or adviser, and secretary of the shipping ministry, representatives from the finance and commerce ministries, and high officials of the corporation, not more than two shareholder directors, and at least one independent director.

"At the end of June 2024, the number of board members was 10 including two independent directors, but due to the withdrawal of the nominated director from the shareholders and owing to transferring a high official, who served as director in the board, the board size now is eight," the report reads.

Meanwhile, individuals connected to Beximco Group resigned from the board of Fareast Islami Life Insurance soon after the fall of the AL government. 

In 2022, the Shibli Rubayat Ul Islam-led BSEC allowed Beximco Group-nominated people in the board of the life insurer. 

Entry of Beximco into Shipping Corporation

In 2022, Beximco purchased a significant number of shares in the Shipping Corporation from the secondary market.

On the record date for FY22, Beximco acquired 80.08 lakh shares, equivalent to 5.25% of the corporation's total paid-up capital. 

Following the acquisition, Beximco sought a position on the corporation's board. To accommodate the Beximco-nominated director, the then board convened an emergency meeting on 23 November 2022, where it approved the nomination.

Subsequently, at its 45th annual general meeting, the corporation's shareholders also approved the appointment of the director.

Established in 1972, just months after the country's independence, the corporation in FY24 year logged a profit of Tk250 crore for the first time in its 52-year history.

With the consistent profit growth, the corporation repaid Tk475 crore to the government for previously acquired vessels.

It also is going to purchase two more ships with its own funding since its financial capacity has been bolstered by continuous profits since 2019.

To expand its fleet, the corporation raised over Tk313.70 crore through a repeat public offering from the capital market back in 2011.

To date, 70% of the public fund remains unutilised as its initial plan was scrapped, according to its latest reports.

The corporation has raised the funds by floating 62.74 lakh ordinary shares of Tk100 at an offer price of Tk500 each, including Tk400 as a premium.

Now, the Shipping Corporation plans to utilise these funds in its upcoming vessel purchase project within one or two years with the purpose of expanding its fleet on rising demand internationally.

In its annual general meeting scheduled for 22 December, it will ask for shareholders' approval for another two-year time extension.