Companies act to be amended this year: commerce secretary

The commerce ministry will amend the companies act by this year to make the law time befitting, Senior Commerce Secretary Tapan Kanti Ghosh said today

The previous amendment of the company act of Bangladesh was partial as all the stakeholders could not reach a consensus, Ghosh said.

However, this year it is expected that all the stakeholders will be able to reach a consensus and measures will be taken to send the draft of the amendment to the parliament this year for final approval, he said.

Although Ghosh did not say specifically when the draft of the amendment would be sent to the parliament, he said the economy of the country has grown a lot over the years and a lot of provisions of the companies act also need to be amended.

For instance, the emergence of e-commerce companies in Bangladesh. The e-commerce business platforms have been demanding the reinstatement of the previous option of advance payment of goods, but the government cannot do it to protect the interests of the customers, Ghosh said.

"Many companies want to wind up and seek exit plans from the ministry, but the procedures are very complex. So these issues need to be amended in the company law," the senior secretary also said.

Earlier, the last amendment of the law was made in 1994.

Ghosh was speaking at a journalist workshop on investigative journalism on company reporting jointly organised by the Economic Reporters Forum (ERF) and MRDI at the ERF office in Dhaka.

Nihad Kabir, an advocate of the Supreme Court and former president of the Metropolitan Chamber of Commerce and Industry (MCCI), said some core areas of the companies act need to be amended soon.

For instance, the exit plan of companies from business, as hundreds of sick companies are facing difficulties and they want to wind up and exit from the business.

However, the exit procedures are very time consuming and complex, she said adding as a result many do not follow the rules in the exit plan.

Similarly, the amendment in merger and acquisition in company acts is also needed, Kabir said.

The first company amendment initiative was taken in 1981 to amend the act of 1913 and finally, it was finalised in 1994, she said.

The issue of share transfer in a company should also be amended. Regarding the government's permission of allowing investment by the local companies abroad, Kabir said as the economy has grown a lot over the years, so the decision of permitting investment abroad is a good one.

She said the permission of investment abroad will ensure technology transfer and will create new markets, said Kabir.

If the government does not allow investment abroad legally, many will invest abroad illegally, she said.

Shahidul Islam, director of CFA Society Bangladesh spoke on the company's financial statement at the event.