Experts and business leaders on Thursday demanded speedy completion of the planned reforms of the companies act to facilitate ease of doing business, reduce cost of business and attract foreign direct investment in Bangladesh.
At a roundtable discussion on reforms of the companies act, they also urged the government to customise the proposed act based on the local context and needs as there were lots of provisions in the draft Companies Act-2013 which were just copied from such acts of other countries without considering Bangladesh context.
They also sought clear definition of merger and acquisition issues in the proposed amendments to the law and adoption of automation to simplify and expedite business process.
The Dhaka Chamber of Commerce and Industry organised the discussion titled ‘Companies Act: Critical Reforms for Private Sector Development’ at its auditorium in Dhaka.
At the meeting, businesses, however, opposed the proposed provision of giving personal guarantee by directors of a company for bank loans as additional security.
The government in 2013 formulated the draft Companies Act to replace the existing Companies Act-1944 as part of modernisation and simplification of business issues.
Former DCCI president Asif Ibrahim expressed dissatisfaction over the delay in completion of the reform process saying that he attended such seminar eight years back.
He said that the proposed act should be customised according to the needs of the country.
There are lots of copy and paste in the draft, he said, adding that drafting members just copied the provisions from companies acts of other countries and pasted those to the draft.
He also said that the act should be finalised and implemented within the current fiscal year.
International Finance Corporation senior economist Masrur Reaz said that reforms of the companies act might bring a significant portion of informal businesses under the formal sector.
He emphasised adopting digital means of communication in the new act.
Former Institute of Chartered Accountants of Bangladesh president Adeeb H Khan said that reforms of the companies act would not bring much result without reforms to the taxation issues as businesses faced major harassment while paying income tax, value-added tax and duties.
Standard Chartered Bank Bangladesh chief executive officer Naser Ezaz Bojiy said that the country needed simplified process of business registration and automation.
He also emphasised clarification of merger and acquisition issues in the proposed companies act as the country might experience an increase number of merger and acquisition issues in coming days.
Akhtar Imam and Associates managing partner Rashna Imam suggested formation of a specialised tribunal to dispose of disputes related to company affairs.
IDLC Finance Ltd chief executive officer Arif Khan said that the planned reforms to the companies act should focus on simplification of business process through automation and on attracting FDI.
He supported the proposed provision in the companies act of taking personal guarantee from directors for bank loans as absence of such provision might further increase the volume of non-performing loans in the banking sector.
The condition, however, may be relaxed for foreign directors and shareholders as they may not be interested in making investment in presence of the provision, he said.
State minister for finance MA Mannan said simplification of the business process was important for improvement in the ease of doing business.
‘We sometimes feel ashamed when we see the country is at the bottom of some rankings including ease of doing business ranking,’ he said.
He, however, expressed doubt over the intention of framing such rankings saying that the developed countries might frame those to weaken the country’s strength and will power when it was moving forward.
DCCI president Abul Kasem Khan demanded cancellation of the provision of personal guarantee by directors for bank loans and introduction of digital means of communications in the law.
Commerce secretary Shubhashish Bose, ICAB president Dewan Nurul Islam and DCCI senior vice-president Kamrul Islam also spoke, among others, at the meeting.
DCCI director Nuher L Khan made the keynote presentation.
Want stories like this in your inbox?
Sign up to exclusive daily email
More Stories from Miscellany