Govt stops renewing licences of service-based foreign/JV cos

FE Team | Published: March 10, 2013 00:00:00 | Updated: February 01, 2018 00:00:00

Shamsul Huda The government's different organisations have stopped renewing licences of the operating commercial service-based foreign/joint venture (JV) companies in the country due to a rule nisi issued by the High Court (HC). Last year one Mirza Walid Hossain filed a writ petition to prevent or impose unfair restrictions in foreign joint venture companies operating in Bangladesh in the commercial sector, following which the HC issued the rule nisi. The HC asked the government not to grant any registration/license/permission/work permit to any foreign and/or joint venture companies, set up only for commercial purposes in the forms of logistics companies, shipping agencies, travel agencies and airlines GSA. In response of the HC rule nisi, the Bangladesh Bank (BB), Dhaka Customs House and other ministries, departments and organisations concerned have already stopped renewing licences to the foreign or joint venture companies and foreign individuals. The BB's Foreign Exchange Investment Department in a letter asked the operating freight forwarding and logistics services, shipping agencies, airlines GSA, distributions and travel agencies not to submit any renewal proposal before June 2013, the extended duration of the HC rule nisi. The writ petition said the government has failed to implement the directives of the executive chairman of the Board of Investment (BoI). The BoI, in 2005, issued directives discouraging cent per cent foreign or joint venture companies in the country's commercial service-based industries. When contacted, BoI executive chairman S A Samad said his office can do nothing in this regard until there is a stay order on the HC directive. He said the government is always positive regarding foreign direct investment (FDI), and if the rule nisi creates problems, those can be solved only through the HC stay order. Currently a good number of foreign airlines, logistics companies, travel agencies and shipping lines have invested millions of dollars in Bangladesh. They are also supporting the country's overall export-import business. A high official in a cent per cent foreign-owned logistics company operating here said a gazette published in 2008 allowed them doing business here by obtaining licence. Chief executive officer of a foreign logistics company said licences of some companies have already expired, and the government agencies concerned are not renewing those licences. As a result, their operations in the country have come to almost a halt. He said the international buyers of local readymade garments (RMG) favour foreign freight forwarding companies due to security and use of advanced technology in overseas correspondence. If Bangladesh operation of those companies is stopped, local RMG sector will be affected, the country's export-import activities will be seriously hampered, and FDI inflow will be reduced, he added.