By Mostafizur Rahman
No state-run company was enlisted on the stock market for the last 10 years due mainly to the government’s apathy and the companies’ unwillingness.
The government has taken several initiatives since 2007 to enlist the government-owned companies on the stock market but was able to enlist only Bangladesh Submarine Cables Company in 2012.
On February 2, 2020, finance minister AHM Mustafa Kamal declared that the government instructed five energy companies to go public and gave them two months to assess the current value of their assets prior to offloading shares of the companies.
However, no company has filed IPO documents with the Bangladesh Securities and Exchange Commission so far.
Apart from the instruction of the finance minister, the BSEC on December 9, 2021 urged 17 state-run companies to be listed on the stock market for achieving excellence in business standards, but no visible progress was seen so far.
Dhaka University honorary professor Abu Ahmed told New Age that the government companies do not want to be listed on the stock market as they have to maintain various compliances and remain under regulatory supervision.
‘Officials of the companies usually try to avoid listing process to escape additional job burden and to protect their own interests,’ he claimed.
Despite making huge losses year after year, the government continues the operation of some companies without making any improvements, Ahmed said.
The government must be serious to enlist the profit-making state-run companies on the stock market and also take steps to recover the companies from loss-making, he said.
Officials of several state-run companies said that offloading shares on the stock market was a complex and time-consuming process.
A company has to take approvals from different ministries for taking any steps to go public, they said.
Besides, the assets of a company must be revalued and also government share money deposited in the company must be converted into shares before getting listed on the market, which delays the listing process.
The Financial Reporting Council on February 11, 2020 issued a notification, making it mandatory for companies to convert share money deposits into shares within six months.
BSEC officials said that the non-listed government companies usually do not follow the accounting standard and corporate governance code.
However, companies must prepare financial statements to comply with Bangladesh financial reporting standards to be listed on the stock exchanges.
Besides, the companies have to abide by corporate governance codes.
Therefore, the government companies remained reluctant to be listed on the stock market to avoid such compliance matters.
There are only 19 state-run companies listed on the stock market.
BSEC executive officer Rezaul Karim told New Age that if the state-run companies enlisted in the stock market and complied with securities rules and regulations, the companies could establish corporate governance and also increase branding and innovation which were necessary to stay in global competition.
The assets of companies should be revalued as well as restructured to be profit-making, he said, adding that the state-run companies usually have huge assets and are not revalued at the current market price.
The revaluation method is very much complex and time-consuming.
Thus, the companies do not intend to revalue the assets, Rezaul said.
The government-owned companies have a common misconception that the companies would not get decent prices if they are enlisted on the stock market, he said.
However, the companies can get a suitable price if revaluation of the entities’ current assets and liabilities is done properly, he said.
For instance, the share prices of Bangladesh Submarine Cable Company, which was the last listed government-owned company, have been increasing day by day.
The company declared 37 per cent cash dividend in 2021. The company reported EPS of Tk 11.57(US$0.13) for the year ended in 2021 as against Tk 5.49 in the previous year. Share price of the BSCCL closed at Tk 223.8 each on April 21.
Former interim government adviser and Bangladesh Securities and Exchange Commission chairman AB Mirza Azizul Islam told New Age that strong political determination was needed to enlist government companies on the stock market, adding that the senior officials of the companies dilly-dally the enlisting process for many years as their accountability will increase.
The enlistment of the companies would enhance the depth of the market and investors would have good securities for investments, he said.
The 17 companies which were urged by the BSEC to get enlisted on the stock market are Bakhrabad Gas Distribution Company Limited (a company of Petro Bangla), LP Gas Limited, Gas Transmission Company Limited, Jalalabad Gas Transmission and Distribution System Limited (a company of Petrobangla), Sylhet Gas Fields Limited, Bangladesh Gas Field Company Limited, Rupantarita Prakritik Gas Company Limited, North-West Power Generation Company Limited, Electricity Generation Company of Bangladesh Limited, Pragati Industries Limited, Karnaphuli Paper Mills Limited, Bangladesh Insulator and Sanitaryware Factory Limited, Hotels International Limited, Biman Bangladesh Airlines Limited, Bangladesh Telecommunication Company Limited, Bangladesh Cable Shilpa Limited and Essential Drugs Company Limited.
