For smooth running of business
Sunday, 27 July 2008
The big business conglomerates of the country are suffering in many ways. Some 30 top businessmen are either staying abroad out of fear or are in jail. It would not matter if corruption charges against them were investigated by devising a mechanism to keep their business enterprises fully functional. This is necessary to keep the market well supplied with goods, produced by them, and for their employees to keep their jobs without adding to unemployment. This is also necessary for the government to get the revenue from these businesses, as they are among the highest contributors to the public coffers, for smooth and unhindered export earnings, plus to satisfy many other needs that can't be described within the confines of this letter.
The banks and other financial institutions have an umbilical relationship with these business houses. But these business houses and the enterprises under them, are failing to operate their accounts for a long time as the owners or members of their board of directors are either absconding or remain in jail. Thus, these organisations are on the brink of closure. In many cases, they are under producing and the employees have had no salaries for months. The Bangladesh Bank sometime ago instructed the banks to deal with them so that their collapse can be avoided. But this instruction is proving fruitless in the absence of detailed advice on how this is to be done.
The Company Law does not allow banks to have dealings with these business organisations under the peculiar situation they are faced with. So, the central bank should give detailed instructions to the banks to allow the directors of these business houses, who are in the country and not in jails or even the senior officers of the enterprises to carry out dealings with banks. For legal cover, the company laws could be amended through ordinance. But as none of these is being done, the conglomerates continue to remain in a limbo. Meanwhile, the banks are failing to receive due repayment of loans from these business houses and the classified loan burden of the banks is increasing. The banks could soon face a crisis if this situation continues. It must be remembered that the banks have big dealings with the big business houses.
The government needs to shape up its policy in a constructive manner at the fastest. Why this has not happened in the last eighteen months is a big question. Continuation of this state of affairs would cost a heavy economic price. In South Korea, a business tycoon was arrested and jailed for corruption. But this did not halt of the functioning of the giant industrial conglomerate over which he presided. The government there understands that the company is too big a national asset to be sacrificed for the corruption of a single person. Government policy in that country ensured the full functioning of the industrial empire while punishing its owner in proportion to his crime.
The same model should apply in case of the business conglomerates in Bangladesh. The contribution of these conglomerates to the national economy must not be ignored while punishing some of their owners. The two must be dealt with as separate issues.
Junaid Douza
Magbazar, Dhaka.
The banks and other financial institutions have an umbilical relationship with these business houses. But these business houses and the enterprises under them, are failing to operate their accounts for a long time as the owners or members of their board of directors are either absconding or remain in jail. Thus, these organisations are on the brink of closure. In many cases, they are under producing and the employees have had no salaries for months. The Bangladesh Bank sometime ago instructed the banks to deal with them so that their collapse can be avoided. But this instruction is proving fruitless in the absence of detailed advice on how this is to be done.
The Company Law does not allow banks to have dealings with these business organisations under the peculiar situation they are faced with. So, the central bank should give detailed instructions to the banks to allow the directors of these business houses, who are in the country and not in jails or even the senior officers of the enterprises to carry out dealings with banks. For legal cover, the company laws could be amended through ordinance. But as none of these is being done, the conglomerates continue to remain in a limbo. Meanwhile, the banks are failing to receive due repayment of loans from these business houses and the classified loan burden of the banks is increasing. The banks could soon face a crisis if this situation continues. It must be remembered that the banks have big dealings with the big business houses.
The government needs to shape up its policy in a constructive manner at the fastest. Why this has not happened in the last eighteen months is a big question. Continuation of this state of affairs would cost a heavy economic price. In South Korea, a business tycoon was arrested and jailed for corruption. But this did not halt of the functioning of the giant industrial conglomerate over which he presided. The government there understands that the company is too big a national asset to be sacrificed for the corruption of a single person. Government policy in that country ensured the full functioning of the industrial empire while punishing its owner in proportion to his crime.
The same model should apply in case of the business conglomerates in Bangladesh. The contribution of these conglomerates to the national economy must not be ignored while punishing some of their owners. The two must be dealt with as separate issues.
Junaid Douza
Magbazar, Dhaka.