FE Report (October 2, 2010)
The Ministry of Finance (MoF) has dismissed the fear of the Ministry of Industries (MoI) that offloading of the shares of state-owned enterprises (SoEs) would spark labour unrest terming it as a 'lame excuse' and urged the ministry to offload the shares of some of the SoEs under its control immediately.
The offloading of SoEs must be completed to uphold the interest of capital market and ensure more accountability in the public sector, a letter of MoF written to MoI last week, said.
Finance Minister AMA Muhith wrote a demi-official (DO) letter to Industries Minister Dilip Barua. The DO letter elaborated the very urgencies of such offloading latest by next December, a top MoF official said.
The issue will be placed to Prime Minister Sheikh Hasina by finance ministry for her intervention if significant development in offloading the considerable shares of SOEs is not made by the industries ministry within the set deadline, he added.
Earlier, the MoI in May this year declined to offload the shares of its profit making SoEs under its control in the capital market fearing labour trouble and backlash in these enterprises. It also feared that the popularity of the incumbent government might be affected by the move of share offloading.
After being rejected by MoI, the MoF wrote letters to industries ministry at least twice to do the needful and extended the time from June 2010 to December, 2010, sources said.
"They are sitting idle and reluctant to lose their control over SoEs,"a high official in the MoF said.
"Issues like losing the popularity of the government and labour unrest in the way of share offloading are more to protect the self interest of the officials in the MoI other than genuine causes."
The SoEs are deliberately delaying the divestment process out of the fear of losing management control, he added.
The officials in the finance ministry said the position of MoI on SoEs is frustrating despite Industries Minister in recent times made a number of statements about his willingness in offloading the shares of profit making companies.
"However, we are yet to be informed about any sort of development on the issue of share offloading by the MoI," an official in the MoF said.
Mr Barua, when asked, said he will hold meeting soon to identify SoEs for share offloading.
"The meeting will be held with the stake-holders of my ministry to identify the SoEs for offloading," the Industries Minister Dilip Barua told the FE on Friday.
Of the 25 SoEs, 11 belong to the Ministry of Power, Energy and mineral resources, while the rest to other ministries including the Ministry of Industries, sources said.
The MoF asked the MoI repeatedly to offload 49 per cent shares of each of the four SoEs, namely, Pragati Industries ltd, Chittagong Dry Dock Ltd, GEM Company Ltd and Bangladesh Blade Factory Ltd latest by December, 2010.
Furthermore, it asked the MoI to take appropriate measures to offload 25 per cent government-held shares of its four listed companies within the extended time.
The listed companies are Atlas Bangladesh, National Tubes, Eastern Cables and Usmania Glass Industries Ltd, a finance ministry official said.
Presently, government owns 51 per cent share of Atlas, Eastern Cables, Usmania Glass and 52.54 per cent of National Tubes. The remaining shares of these companies belong to general and institutional investors.
The SoEs, namely, Gas Transmission Company, Jalalabad Gas Transmission and Distribution System, Sylhet Gas Field Company, Bangladesh Gas Field Company, Rupantarito Prakritik Gas Company and Rural Power Company, are under the control of the power and energy ministry.
The investors are now facing shortage of securities. Only 461securities are listed on the two bourses.
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