Companies act to be rewritten this year
The commerce ministry is expecting a full amendment to the companies act this year to make the vital law time-befitting, said Tapan Kanti Ghosh, senior secretary to the commerce ministry, yesterday.
The previous amendment to the companies act was incomplete as all the stakeholders could not reach a consensus, Ghosh said.
This year it is expected that all the stakeholders will be able to work out differences, and measures will be taken to send the draft of the amendment to parliament for final approval, he said.
Ghosh was speaking at a workshop on investigative journalism on company reporting jointly organised by the Economic Reporters' Forum (ERF) and the MRDI at the ERF office in Dhaka. Journalists who report on economic, business and trade issues participated in the event.
Although Ghosh did not specify when the draft of the amendment would be sent to parliament, he said the economy of the country has grown much over the years and hence, many of the provisions of the companies act need to be updated.
For instance, e-commerce business platforms have been demanding the reinstatement of the previous option of advance payments, but the government cannot do so for the sake of customers' interests, Ghosh said.
Many companies want to wind up and seek exit plans from the ministry, but the procedures are complex. So these issues need to be amended in the company law, the senior secretary said.
The last amendment to the law was made in 1994.
Nihad Kabir, an advocate of the Supreme Court and a former president of the Metropolitan Chamber of Commerce and Industry (MCCI), said some core areas of the companies act need to be amended soon.
She also cited examples of many companies that want to wind up operations and seek exit plans but are now facing difficulties in doing so.
As the exit procedures are time-consuming and complex, many companies do not follow the rules properly, she said, adding that amendment regarding merger and acquisition is also needed.
The first amendment initiative was taken in 1981 to update the act of 1913 and the amendment was finalised in 1994, Kabir said.
The issue of share transfer in a company should also be addressed.
Regarding the government's go-ahead for the local companies to invest abroad, Kabir said, as the economy of the country has witnessed tremendous growth over the years, the decision was a good one.
The permission for investment abroad will ensure technology transfer and create new markets, she said.
If the government does not allow companies to invest abroad legally, many will resort to illegal means, she added.
Shahidul Islam, director of the CFA Society Bangladesh, spoke on various issues pertaining to companies' financial statements.
Hasibur Rahman, executive director of the MRDI; Sanaul Haq, director; Sharmeen Rinvy, president of the ERF; M Shafiqul Alam, vice-president; and SM Rashidul Islam, general secretary; also spoke.