A complexity emerged at a unitholder meeting on Thursday (October 31) regarding a proposed extension of the tenure of the Asian Tiger Sandhani Life Growth Fund.

The administrator sought advice from the Bangladesh Securities and Exchange Commission (BSEC).

In a letter to BSEC, Bangladesh General Insurance Company (BGIC), the administrator of the closed-end mutual fund, noted that only 15 of the 3,913 unitholders were present at the meeting.

Held at 11 a.m. on Thursday at the RAOWA Convention Hall in the capital, the meeting resulted in a show of hands, during which 11 members voted against the proposal to extend the mandate of the fund for another 10 years after its conclusion in March 2025 .

After a show of hands rejected the extension proposal, some voters called for a vote.

Opponents of the extension held a total of over 44.33 lakh units, while supporters accounted for over 59.78 lakh units.

Among the supporters, an institutional investor, Trust Bank Investment Limited, held 51.88 lakh units; however, the BGIC administrator declared this vote invalid because Masud Rana, who voted on behalf of Trust Bank Investment, did not have the proper authorization from the institution.

As a result, the trustee announced that the majority decision was in favor of “no extension”.

In light of this situation, the Trustee has sought advice from BSEC on next steps.

BGIC also asked BSEC to communicate its decision through the negotiating committee, citing the issue as “price sensitive”.

BSEC executive director and spokesperson Rezaul Karim confirmed the developments, saying the regulator was “working on it.”

Previously, BSEC had been engaged in a legal battle for the speedy liquidation of closed-end mutual funds, but amended its regulations in 2018 to allow an extension of ten-year tenure based on a majority vote of holders of shares.

However, many mutual fund investors found this painful, as their investments in multiple closed-end mutual funds would be locked in for an additional ten years.

A timely redemption would allow them to get their money back at the funds’ current net asset value, especially since most closed-end funds trade at a discount on stock exchanges.

As of October 27, the 37 listed mutual funds traded on average at 52% of their published net asset value.
A senior BSEC official said on Saturday (November 2) that a maturing open-end mutual fund was unlikely to receive an extension of its tenure.

The draft amendments prepared by the regulator for the regulation of mutual funds do not include provisions to extend the exercise period of open-ended funds.

However, if a majority of investors agree, the funds could potentially move to open-ended status; otherwise, liquidation remains the only option.