Zero progress in offloading shares of state-run firms

Some of the 26 state-owned enterprises that were instructed to offload their shares in the stockmarket are being resolutely defiant in doing so, dragging the matter for almost ten years now.

Take, for instance, Liquefied Petroleum Gas Ltd (LPGL), which has failed to meet the deadline set for offloading its share by the prime minister and the finance minister -- five times in the last 10 years.

Finance Minister AMA Muhith had set the deadline of April 2008, and another of June 2010. Then Prime Minister Sheikh Hasina got involved, giving a directive to offload LPGL's shares by December 2010.

As in the previous two times, the deadlines were disregarded. Muhith set two more deadlines after that: March 2011 and June 2016. Nothing is yet to be done on this front.

The narrative holds for 25 other companies, all of which failed several deadlines set by the PM and the finance minister.

On Wednesday, Muhith sat with the concerned ministries and regulators to review the progress of the share offloading process by the companies, only to learn there has been absolutely no movement on that front.

The majority of the companies showed negative attitude towards share offloading, according to a finance ministry report that was placed at the meeting. After detailed discussion, it was decided at the meeting that a committee will be formed on this matter.

The committee, which will be led by Mohammad Muslim Chowdhury, additional secretary of the finance ministry, will submit a report in the next one year.

With a view to injecting good shares into the stockmarket, the finance ministry in 2005 decided to offload the shares of 63 state-owned enterprises. So far, only eight have offloaded their shares. Some 29 SoEs were suspended, while the other 26 are procrastinating doing the deed.

Of the 26 companies, nine are under the energy division, four under the power division, five under the industries ministry, three under the civil aviation and tourism ministry, four under the post and telecommunication ministry, and one under health service division.

The energy companies are: LPGL, Bakhrabad Gas Transmission and Distribution Co, Gas Transmission Co Ltd, Jalalabad Gas T&D System, Paschim Anchal Gas Co Ltd, Sylhet Gas Field Co Ltd, Bangladesh Gas Field Co Ltd, Titas Gas Transmission & Distribution Co Ltd, and Rupantarito Prakritik Gas Co Ltd.

The companies said they will consider offloading their shares if they can find new gas fields or their production increases in future.

The power companies are: Power Grid Co of Bangladesh, Northwest Power Generation Co Ltd, Electricity Generation Co of Bangladesh Ltd, and Ashuganj Power Station Co Ltd.

Despite repeated requests, the companies did not send any information and data about share offloading, the report said.

The companies under the industries ministry are: Pragoti Industries Ltd, Chittagong Dry Dock Ltd, Karnaphuli Paper Mills Ltd, Bangladesh Insulator and Sanitary Ware Factory Ltd, Chhatak Cement Factory Ltd.

Chhatak Cement Factory did not provide any work plan for share offloading. Instead, it said it has taken up a Tk 667 crore initiative to make the company a profitable venture.

Pragoti Industries said they have signed an agreement with Mitsubishi Motors of Japan, which prevents it from offloading its shares.

The companies under the civil aviation and tourism ministry are: then Sheraton Hotel, Sonargaon Hotel, and Biman Bangladesh Airlines.

Sheraton and Sonargaon said they would offload shares once their renovation works are completed.

Biman Bangladesh Airlines will offload 10 percent of its shares once it makes profit for three years in a row, according to the securities exchange laws.

The national flag carrier had logged in profits in fiscal 2014-15 and fiscal 2015-16. If it can repeat the feat for fiscal 2016-17 it will be eligible for offloading shares.

The companies under the post and telecommunication ministry are: Teletalk, Bangladesh Telecommunications Company Ltd, Bangladesh Cable Industries Ltd, and Telephone Shilpa Sangstha.

Essential Drugs Company Ltd is under the health service division.

There are allegations that the board members, especially those who come from different ministries and divisions, do not want to list the companies.

They fear they will no longer get to enjoy different benefits and they will also have to become more accountable and transparent by complying with the corporate governance guideline.

Market stakeholders such as the Dhaka and Chittagong bourses, merchant bankers and stockbrokers were calling for the listing of state-owned companies and multinational firms for long to boost the supply of shares in the secondary market.