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Divestment of SOE shares unlikely this year
10/10/2005
The divestment of shares of the state-owned enterprises (SOEs) is unlikely to be undertaken this year, reports UNB quoting insiders in the capital market watchdog -- the Securities and Exchange Commission (SEC).
The government had earlier directed for offloading the shares of the SOEs in the capital market by this month.
At a high-level inter-ministerial meeting on August 31, Finance and Planning Minister M Saifur Rahman renewed the instruction to the state-owned companies to offload their shares in the capital market. He noted then dillydallying by some of the directors of such companies in implementing the earlier directive.
After the meeting, Saifur Rahman said a directive was also issued for offloading the government shares in the multinational companies with a view to strengthening the capital market.
The state-owned companies set to offload their shares in the stock-market include: Bangladesh Hotels, Bangladesh Services Limited, Bangladesh Shipping Corporation, Eastern Cables, Eastern Lubricants, National Tubes, Renwick Jaineswar, Zeal Bangla Sugar, Usmania Glass, Shyampur Sugar, Rupali Bank, Reckitt & Benckiser and Padma Oil.
About the time-frame for the corporatisation, the Finance Minister said: "Some companies will get one month while some others will be given two months to complete the procedure."
An official at the SEC told the news agency that the initial work was yet to start for beginning the process for offloading the government shares. "It may take the remaining months of this year to complete all the formalities," he said.
The SEC official said the government-held shares in state-owned companies could come in the market through the Investment Corporation of Bangladesh (ICB) or in the form of initial public offerings (IPOs).
The listed companies can float the shares through the ICB or open an account or appoint a stockbroker dealer. The non-listed companies could come in the market through IPOs, he added.
President of Dhaka Stock Exchange (DSE) M Shahiq Khan said the offloading can be done in one month or it might take 10 years.
"It depends on the willingness of the government," he said, hinting at the 'bureaucratic red tape' that might be hindering the expeditious offloading of government shares.
Another inter-ministerial meeting is likely to take place later this month to take stock of the progress relating to offloading of shares.
The Dhaka Stock Exchange (DSE) and the SEC gave the lists of the companies to be offloaded to the Finance Ministry before the preparation of the national budget for fiscal 2005-06.
On the other hand, the Bangladesh Biman (BB) authorities on October 06 decided to offload 61 per cent share of the loss-incurring national flag carrier while the previous decision was for divesting 51 per cent of the BB's shares.
With the latest decision taken at a meeting of the BB's Board of Directors, the government will hold only 39 per cent share of the national airlines.
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