FE Report (September 22, 2010)
The parliamentary standing committee on finance will hold a meeting today (Thursday) with stakeholders concerned to discuss a host of capital market issues, including offloading of shares of the 26 state-owned enterprises (SoEs) as was promised by the finance minister earlier.
Energy secretary, former advisers Akbar Ali Khan and Mirza Azizul Islam, SEC chairman and other officials, the incumbent and immediate past chairmen of Dhaka and Chittagong stock exchanges, president of Bangladesh Association of Publicly Listed Companies (PLCs) and other officials are expected to attend the meeting.
Standing committee chairman AHM Mostafa Kamal told the FE that offloading of the shares of the SoEs in question was necessary to cool off an overheated market.
Among others, the issues of demutualisation of stock exchanges, setting up of special courts for handling stock market related cases, empowering the Securities and Exchange Commission with absolute authority to deal with affairs of the listed companies, establishment of financial reporting council (FRC) and human resources development at the SEC are expected to be discussed in the today's meeting.
Mr Mostafa Kamal said finance minister AMA Muhith has repeatedly assured that the SoEs would be offloaded but the assurance is yet to be materialised.
The finance minister in January announced to offload the 26 SoEs and but energy and industries ministries expressed their reluctance to do so.
Fifteen companies out of 26 are belonged to the two ministries.
"The offloading will ensure accountability and transparency of the SoEs and it will ultimately lead to better corporate governance in the country," Mr Mostafa Kamal said.
The Indian government raised Rs 870 billion in 2004 offloading five public sector units (PSUs) and the market capitalisation of the same PSUs now stands at Rs 2.87 trillion, he said.
The standing committee chairman maintained that the market was not working according to the fundamentals of the listed issues.
Officials concerned said at the meeting the SEC would place at least half a dozen proposals to facilitate smooth operation of the capital market.
The regulator would attach importance to the offloading of the SoE shares to beef up supply of stocks, said an official.
"The demutualisation of the stock exchanges is a proposal it would press at the meeting for the sake of transparency and proper growth of the capital market," he said.
At the same time the SEC will request the committee to recommend actions on the establishment of a FRC to bring transparency in companies' financial statements prepared by the auditors.
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