Last week's much-hyped meeting on the listing of state-run and multinational companies delivered little beyond a renewed reminder of the government's intent to their top management.
Despite Finance Adviser Dr Salehuddin Ahmed's claim that 10 companies had agreed to offload shares, meeting participants told The FE in recent telephone conversations that the representatives had only committed to placing the matter before their boards.
Dr Ahmed on Wednesday held a meeting at the Bangladesh Secretariat with three advisers and top officials of targeted state-run and multinational companies, including Unilever Bangladesh, to press the issue.
"But no procedural progress could be achieved at the meeting," said one participant, requesting anonymity.
The FE spoke to three meeting participants, whose accounts corroborated each other regarding the outcome.
Some participants defended their non-listed status, while others openly argued against listing.
A representative of Unilever Bangladesh told the meeting that its subsidiary, Unilever Consumer Care, had already been listed on the bourses and that this fulfilled the obligation to share profits with the public.
However, Unilever Consumer Care was listed when it was GSK Bangladesh. Unilever acquired the company later on in June 2020.
Sources said the finance adviser rebuked companies that expressed reluctance to issue primary shares in the secondary market.
He reminded the representatives that it was the government's decision to offload its own stakes in multinational companies.
"Then why would you not offload your shares?" the finance adviser asked.
He told the Unilever representative that the company must offload shares alongside the government's stake.
According to meeting sources, the adviser said the government had already decided to offload its 5 per cent stake and that the company would have to offload another 5 per cent.
The chairman of the state-run Investment Corporation of Bangladesh (ICB), Prof Abu Ahmed, told the meeting that the government should widen the tax differential between listed and non-listed companies to compel state-owned enterprises and multinational firms to enter the equity market.
He added that companies in the UK are required to offload at least 10 per cent of their paid-up capital, whereas the Bangladesh government was pressing for only a 5 per cent offloading.
Multinational companies, Prof Ahmed said, are sharing profits with the public in other countries. "Then why are they not doing it here?" he asked.
The interim government announced in May last year a plan to bring more companies to the secondary market to improve its depth.
So far, no visible progress has been made in executing the plan, and Wednesday's meeting also failed to move the process forward.
Asked about the meeting outcome, Prof Ahmed told The FE that it was a high-profile meeting attended by four advisers, bureaucrats and top officials of the targeted companies.
"A strong message was delivered, but we cannot speak about execution yet," he said. Two other participants also expressed dissatisfaction over the lack of progress in implementing the government's listing decision.
At Wednesday's meeting, a representative of Nestlé Bangladesh said the government held no stake in the company.
In response, the finance adviser said it did not matter whether the government had a stake and that the company would still have to go public.
The meeting also raised complications regarding the listing of Karnaphuli Fertiliser Company Ltd (KAFCO).
The company's regulations allow shareholders to transfer their shares to existing shareholders. A foreign shareholder is reportedly planning to transfer its stake, which the government could initially receive and later offload in the market.
Another participant, speaking on condition of anonymity, said that while the finance adviser strongly emphasised the need to list multinational companies, the commerce adviser later softened the tone.
Ultimately, representatives of state-run and multinational companies concluded the meeting by saying they would seek board approval for listing after placing the meeting minutes before their boards.
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