Govt to list profitable state-owned enterprises in capital market

The government has agreed in principle to bring profitable state-owned enterprises, including multinational companies with government shares, to the capital market, aiming to deepen the stock market and restore investor confidence.

Several profitable state-owned companies will be listed through direct listing, while multinational firms have informed the government that decisions on listing will be taken through their respective board meetings.

The decision came following a high-level meeting held at the Ministry of Finance on Wednesday, chaired by Finance Adviser Dr Salehuddin Ahmed.

The meeting set an initial target of bringing 10 companies to the capital market, according to statements made by the Finance Adviser and Investment Corporation of Bangladesh (ICB) Chairman Abu Ahmed after the meeting.

The meeting was attended by chief executives of the identified companies, along with the Commerce Adviser, Advisers for Power, Energy and Mineral Resources, and Industries, the Chief Adviser’s Special Assistant (Finance Ministry), the ICB Chairman and the Chairman of the Bangladesh Securities and Exchange Commission (BSEC).

The companies identified include Karnaphuli Gas Distribution Company Limited, Karnaphuli Fertiliser Company Limited (KAFCO), North-West Power Generation Company Limited, Pashchimanchal Gas Company Limited, Syngenta Bangladesh Limited, Sylhet Gas Fields Limited, Unilever Bangladesh Limited, Sinovia Bangladesh Limited, Novartis (Bangladesh) Limited and Nestlé Bangladesh PLC.

Speaking to journalists after the meeting, Finance Adviser Dr Salehuddin Ahmed said the stock market had now “largely come within a legal framework” and that the focus must shift towards increasing market depth and restoring confidence.

“To regain confidence, we have said that shares of good, fundamentally strong government companies should be offloaded,” he said.

When asked what decision had been taken regarding multinational companies, the Finance Adviser said the government holds shares in several of those firms, but they remain unlisted.

Responding to questions on whether the listing process would now begin and whether the companies had agreed, he said the process would start as the government had given its consent, but the companies would require board-level decisions.

“They have said their decisions cannot be taken without board approval. However, from the government’s side, we have given consent,” he said.

Asked why similar initiatives in the past failed to make progress, Dr Salehuddin said this time the matter had moved further than before. “Earlier, it did not go this far. This time, the ministry has given approval,” he added.

On whether any deadline had been set for the companies, the Finance Adviser said they had been asked to act quickly. “We want the process to start,” he said.

Regarding the possibility of listing companies during the tenure of the current government, Dr Salehuddin acknowledged the complexity of the process.

“We are trying. These are complicated issues. We cannot ignore company law,” he said.

When journalists pointed out that past meetings often failed to translate into implementation, he said the Industries Ministry had already sent letters indicating willingness to offload shares.

ICB Chairman Abu Ahmed said the government’s intention was driven by public interest. “There is no interest bigger than public interest,” he said.

Referring to multinational listings in neighbouring markets, he said, “If Nestlé can be listed in Bombay, what is the problem here? Unilever’s GSK portion is listed, but the core part is not. Yet in Bombay it is among the top ten. It is listed in Pakistan and Thailand as well.”

He said incentives could be offered if companies demanded them.

“If they want incentives or tax benefits, those should be given. But if they do not come, then taxes should be increased. It’s very simple. Otherwise, we will have to wait many more years,” he added.

Asked whether the companies had given consent at the meeting, Abu Ahmed said they had been conveyed a clear message.

“They have been told that the people of Bangladesh want this, and they have been informed very clearly,” he said.

On state-owned enterprises, he said the Industries Ministry and the Power, Energy and Mineral Resources Ministry had been asked to proceed.

“The secretaries were present and they gave consent. The problem is delay. I see no reason for delay in direct listing,” he said.

Abu Ahmed also said the government holds around 40% shares in Unilever Bangladesh.

“I am not even asking to sell five per cent of that 40%. Can’t I even sell government shares? They say they need board meetings abroad,” he added.