Profitable SOEs, MNCs may offload shares

Prime Minister Tarique Rahman has unveiled a multipronged reform agenda to restore stability on the stock market, rebuild investor confidence and bring to justice the share scammers responsible for rendering investors financially ruined.
In reply to a written question during PM's question hour in the 21st sitting of the second and first budget session of the 13th Jatiya Sangsad on Wednesday, he said the government has a plan to identify all those responsible for the prolonged decline in the stock market and take legal action against them.
"Investigations into stock-market scandals have already been conducted through the Anti-Corruption Commission (ACC), leading to the identification of several individuals and the filing of cases against them," the prime minister says, adding that investigations are continuing to determine whether other individuals or institutions were involved.
The parliamentary sitting, chaired by Speaker Hafiz Uddin Ahmed, took up the question raised by lawmaker ABM Mosharraf Hossain on behalf of Khulna-4 MP SK Azizul Bari. Tarique Rahman mentions that various experts, investors' associations and investigative bodies had examined the reasons behind the persistent downturn of the capital market during the previous Bangladesh Awami League government.
According to those findings, the principal causes include market manipulation and artificial price inflation or suppression, irregularities in initial public offerings (IPOs), bond issues and other securities, weak regulatory oversight, delayed enforcement actions, poor corporate governance, lack of transparency in financial reporting, limited participation by institutional investors, declining investor confidence, policy inconsistencies and the absence of an investor-friendly tax regime, he adds
He informs the lawmakers that Bangladesh Securities and Exchange Commission (BSEC) has imposed fines amounting to Tk 14.97 billion on individuals and institutions involved in market manipulation, irregularities and corruption.
Reports prepared by investigation committees identifying those responsible have also been forwarded to the ACC for further legal action.
The prime minister reaffirms that their newly elected government is determined to restore stability on the capital market and strengthen investor confidence by promoting good governance, transparency, accountability, greater market depth through product diversification and wider investor education.
As part of that effort, he announces a series of priority programmes, saying that the government appointed a new BSEC chairman and three commissioners on June 4 to strengthen the regulator with experienced professionals. Soon after taking office, the new commission withdrew the longstanding floor-price mechanism.
The government will encourage profitable state-owned enterprises to list on the stock exchanges through direct share offloading, while creating opportunities for multinational corporations and other large-cap companies to do the same, the PM says.
"It will also encourage fundamentally strong companies, including small and medium-sized enterprises (SMEs), to enter the capital market.
"To curb market manipulation, legal protection and incentives will be introduced for whistleblowers reporting irregularities." Also, the government plans to introduce a new policy for the enlistment of approved auditors and audit firms to strengthen the auditing of listed companies and market intermediaries.
mirmostafiz@yahoo.com