HC stays appointment of independent directors at Beximco Pharma

The High Court has stayed the appointment of independent directors to the board of Beximco Pharmaceuticals for three months, the drugmaker disclosed in a filing with the London Stock Exchange.

On 1 January, the Bangladesh Securities and Exchange Commission (BSEC) decided to appoint nine independent directors to the board of the drugmaker, which is listed on both the London Stock Exchange and the Dhaka Stock Exchange (DSE).  

The commission's aim was to ensure a majority of independent non-executive directors on the board, and it later sent a letter to the company.  

In a filing on 14 January, Beximco Pharmaceuticals said it challenged the BSEC order in the High Court. At a hearing, the court granted a stay for three months, meaning the appointments will not become effective until the court hears the company's petition.  

The filing further stated that the letter was issued based on a decision by a government-appointed advisory committee for Beximco Industrial Park and subsequent instructions from the Ministry of Finance.  

In seeking to appoint new directors, BSEC is invoking its power under Rule 20A of the Securities and Exchange Ordinance 1969, which allows the BSEC to act in a manner it deems necessary to protect the interests of investors.  

"Following the court decision on the BSEC order, the appointment of the new directors will also remain subject to ratification by the company's shareholders at the next annual general meeting and due diligence and disclosure for UK regulatory purposes," the filing stated.  

In an earlier filing in August last year, Beximco Pharmaceuticals said its manufacturing and distribution facilities sustained no significant damage during the recent unrest against the Sheikh Hasina-led government.  

In light of the unrest across Bangladesh and the appointment of an interim government, the company issued a statement to the London Stock Exchange.  

The drugmaker mentioned that Salman F Rahman, in his position as non-executive vice-chairman, had no role in the day-to-day operations of the company.  

The company issued the statement on 15 August in response to the arrest of Salman F Rahman. 

In the statement, Beximco Pharma clarified that Salman was a private industry and investment adviser to the prime minister of the previous government, which has since been replaced by an interim administration following civil unrest in Bangladesh.  

The company understood that Salman was arrested by the Dhaka Metropolitan Police on 13 August and was being remanded in custody for 10 days while an investigation was carried out into alleged offenses, according to the statement.