For the functioning of business conglomerates
Amirul Islam | Saturday, 31 May 2008
Soon after the meeting between the government and the business, the concerned quarters suggested that the business needs the assurance that the decisions or recommendations would be implemented at the ground level. The business representatives say they are yet to see the evidences of a distinct change in the government attitude. In other words, their confidence is still lagging. Only a confident business community, by undertaking new investment operations, can generate economic growth needed for poverty alleviation and creation of jobs and income. But the economy appears to be sluggish due to lack of confidence on the part of businesses and their consequent 'withdrawal' mentality. So the restoration of vital business confidence remains still a challenging task for the government. This should be addressed with immediacy and prudence for the sake of the economy.
Meanwhile, the big business conglomerates of the country are suffering in many ways. Some 30 top businessmen are either in self exile out of fear or are in the jails. It would not matter if corruption charges against them were investigated by devising a mechanism to keep their enterprises fully functional. This is necessary to ensure the supply chain and production in tact. It was also necessary for their employees to keep their jobs without adding to unemployment as well as for the government to get revenue from these businesses, the biggest contributors to the government's coffers. It was necessary for smooth uninterrupted conduct of export and import trade, for unhindered export earnings, as well as to satisfy many other needs, that can't be touched within the confines of this column.
As far the banks and other financial institutions are concerned, neither some business houses nor the enterprises under them are being able to operate their accounts for a long time as the owners are either absconding or languishing in jails. These enterprises are on the brink of closure. Under production and no pay for the employees for months are troubling many of the enterprises. The Bangladesh Bank sometime ago instructed the banks to deal with such enterprises so that they don't collapse. But this instruction is proving useless as no detailed advice was given how this should be done. The company law does not allow banks to deal with business organisations under the peculiar situation they are in. That is why the Bangladesh Bank should give detailed instruction so that the banks can deal with the directors of these business houses, who are in the country and not in jail or even senior officers of the enterprises. For legal coverage the company law needs to be amended through ordinance. But as these tangles remain unresolved, a number of business conglomerates remain in troubles. Meanwhile, as the enterprises are failing to repay loans; the classified loan burden of the banks is increasing. The banks would come under strain if this situation continues for long as some of such big business houses were also the big borrowers.
The situation requires the government to reshape its policy without wasting time and keeping the ground realities in view. Why this has not happened is a big question. But now such indifference would claim a heavy economic price. In South Korea, the main proprietor of a world famous company was arrested and jailed for corruption. But this has not affected the full functioning of the giant industrial conglomerate. The government there decided that this company was too big a national asset to be sacrificed for the corruption of the proprietor. The government policies in Korea ensured that the enterprise function fully while its owner got punishment proportionate to his crime. Some business leaders in other countries are given "suspended sentence", in the event of their not so grave offence. But such a practice is not there in this country.
Under such circumstances, a befitting model should apply in case of some allegedly offending business conglomerates in Bangladesh. There is no need to close down such conglomerates to punish some of their owners. The two must be dealt with as separate issues.
Meanwhile, the big business conglomerates of the country are suffering in many ways. Some 30 top businessmen are either in self exile out of fear or are in the jails. It would not matter if corruption charges against them were investigated by devising a mechanism to keep their enterprises fully functional. This is necessary to ensure the supply chain and production in tact. It was also necessary for their employees to keep their jobs without adding to unemployment as well as for the government to get revenue from these businesses, the biggest contributors to the government's coffers. It was necessary for smooth uninterrupted conduct of export and import trade, for unhindered export earnings, as well as to satisfy many other needs, that can't be touched within the confines of this column.
As far the banks and other financial institutions are concerned, neither some business houses nor the enterprises under them are being able to operate their accounts for a long time as the owners are either absconding or languishing in jails. These enterprises are on the brink of closure. Under production and no pay for the employees for months are troubling many of the enterprises. The Bangladesh Bank sometime ago instructed the banks to deal with such enterprises so that they don't collapse. But this instruction is proving useless as no detailed advice was given how this should be done. The company law does not allow banks to deal with business organisations under the peculiar situation they are in. That is why the Bangladesh Bank should give detailed instruction so that the banks can deal with the directors of these business houses, who are in the country and not in jail or even senior officers of the enterprises. For legal coverage the company law needs to be amended through ordinance. But as these tangles remain unresolved, a number of business conglomerates remain in troubles. Meanwhile, as the enterprises are failing to repay loans; the classified loan burden of the banks is increasing. The banks would come under strain if this situation continues for long as some of such big business houses were also the big borrowers.
The situation requires the government to reshape its policy without wasting time and keeping the ground realities in view. Why this has not happened is a big question. But now such indifference would claim a heavy economic price. In South Korea, the main proprietor of a world famous company was arrested and jailed for corruption. But this has not affected the full functioning of the giant industrial conglomerate. The government there decided that this company was too big a national asset to be sacrificed for the corruption of the proprietor. The government policies in Korea ensured that the enterprise function fully while its owner got punishment proportionate to his crime. Some business leaders in other countries are given "suspended sentence", in the event of their not so grave offence. But such a practice is not there in this country.
Under such circumstances, a befitting model should apply in case of some allegedly offending business conglomerates in Bangladesh. There is no need to close down such conglomerates to punish some of their owners. The two must be dealt with as separate issues.