In a strong warning, Bangladesh finance minister AMA Muhith has said heads of state enterprises will be shown the door if they fail to offload shares on the stockmarket by the ‘next’
deadline.
The government plans to extend the deadline to the noncompliant state-owned enterprises (SoE) for the last time this week, after they defied orders from the highest level to offload their shares.
“I am unhappy with them, as it is not happening. I will call them to a meeting and tell them if ‘you cannot do it within certain days you have to resign’,” the minister said while speaking to a delegation of Dhaka Chamber of Commerce and Industry at his office.
“I am going to impose the condition that if they fail, their resignations will be effective then and there.”
In the last two years, the finance minister held several meetings with the SoEs to increase supply of quality shares to the bourses. But all of them failed to oblige.
His warning came after 34 state-run enterprises repeatedly failed to go public, although the prime minister endorsed the move to shore up bourses amid a crunch of quality shares.
Muhith now plans to sit with the ministries on February 10 in an effort to increase shares of the government-run companies in the stockmarket, which is going through a turbulent period.
The government asked nine SoEs—Rupali Bank, Bangladesh Shipping Corporation, Power Grid Company of Bangladesh, Dhaka Electric Supply Company, Titas Gas Transmission and Distribution, Meghna Petroleum, Jamuna Oil, National Tubes and Eastern Lubricants Blenders—to offload 1-17 percent additional shares in the market.
The minister also held a meeting in December last year and set January 15 as the deadline to release the shares, but only Rupali Bank showed some inclination to oblige.
Muhith also sent letters to the related ministries and divisions, asking them to execute the government decision and expressed dissatisfaction over the authorities’ procrastination.
“The deadline is set in consultation with the prime minister. No ministry has the jurisdiction to change it. The ministry of energy and mineral resources did not do the right thing,” the minister said in a letter sent to the energy and mineral resources ministry after it extended the deadline to offload shares.
Liquefied Petroleum Gas, Bakhrabad Gas Transmission and Distribution Company, Gas Transmission Company, Jalalabad Gas T&T Systems, Paschimanchal Gas Company, Rupantarito Prakritik Gas Company and Sylhet Gas Fields Company, Bangladesh Gas Fields Company—all under the Energy and Mineral Resources Division—missed three deadlines in as many years, with the latest on December 31 last year.
Dhaka Power Distribution Company received four time extensions to offload 15 percent additional shares but it failed. The latest deadline expired on December 31 last year.
Rural Power Company also failed three deadlines to go
public.
Progoti Industries and Chittagong Dry Dock, both under the industries ministry, breached three deadlines and now have to list on the stockmarket by June.
GEM Company and Bangladesh Blade Factory also could not offload shares despite missing three deadlines, with the latest in December last year.
The civil aviation and tourism ministry also failed to meet two deadlines for offloading shares of Bangladesh Services Ltd (Sheraton Hotel) and Hotel International Ltd (Sonargaon Hotel). Sonargaon Hotel has been allowed extension for the third time until June 2011 to go public.
The post and telecommunications ministry could not offload shares of mobile operator Teletalk and Bangladesh Telephone Company Ltd although they were given deadlines three times.
Under the same ministry, the deadline for offloading shares of Bangladesh Cable Industries and Telephone Shilpa Sangstha expired last year.
The health and family planning ministry could not honour the government order either, as the deadline for offloading 25 additional shares of Essential Drugs Company expired twice.
The shipping ministry also missed two deadlines for offloading 17.5 percent additional shares of Bangladesh Shipping Corporation.
Read the original story on The Daily Star
