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 MoF asks 25 SoEs to offload shares by Dec Writes to ministries to do the needful

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Join date : 2010-05-30

PostSubject: MoF asks 25 SoEs to offload shares by Dec Writes to ministries to do the needful   Mon Jul 05, 2010 4:24 am

Nazmul Ahsan

The Ministry of Finance (MoF) has asked 25 state-owned-enterprises (SoEs) to offload their shares in the stock market latest by December this year to help make the capital market vibrant, official sources said.

The ministry has issued the directive last week amid unwillingness of the SoEs that have been already identified for offloading shares. The SoEs are deliberately delaying the divestment process out of the fear of loosing management control, sources said.

All the enterprises concerned have failed to offload their shares by June last in line with decision taken earlier, sources said.

The MoF, in its letter to six ministries that control at least 25 SoEs, said the capital market now needs good securities as the flow of investors to the capital has been rising continously.

Any deliberate foot-dragging on the implementation of the government's decision to offload the share of SoEs will be considered as an obstacle to the healthy growth of the capital market, the letter added.

The ministries of industries, communication, power, shipping and post and telecommunications, have been asked to update the MoF on the latest situation relating to offloading the shares of their respective SoEs.

The SoEs, numbering 25, have been asked to offload between 25 per cent and 49 per cent shares by December this year.

"The issue will be placed before the Prime Minister if any ministry fails to do the needful within the extended period," a high official in the MoF said.

He said the government would go tough on the member of the management of the SoEs who do not want to lose control.

Of the 25 SoEs, 11 belong to the Ministry of Power, Energy and mmineral resources, while the rest to other ministries including the Ministry of Industries, sources said.

The MoF asked the MoI to offload 49 per cent shares of each of the four SoEs, namely, Pragati Industries ltd, Chittagong Dry Dock Ltd, GEM Company Ltd and Bangladesh Blade Factory Ltd latest by December, 2010.

Furthermore, it asked the MoI to take appropriate measures to offload 25 per cent government-held shares of its four listed companies within the extended time.

The listed companies are Atlas Bangladesh, National Tubes, Eastern Cables and Usmania Glass Industries Ltd, a finance ministry official said.

Earlier, the MoI in May this year declined to offload the shares of its profit making SoEs under its control in the capital market fearing labour trouble.

Presently, government owns 51 per cent share of Atlas, Eastern Cables, Usmania Glass and 52.54 per cent of National Tubes. The remaining shares of these companies belong to general and institutional investors.

The SoEs, namely, Gas Transmission Company, Jalalabad Gas Transmission and Distribution System, Sylhet Gas Field Company, Bangladesh Gas Field Company, Rupantarito Prakritik Gas Company and Rural Power Company, are under the control of the power and energy ministry.

When asked, a top official in the energy ministry said they are taking more time as auditing and appointing an issue manager for direct listing of their SoEs are time consuming and complicated affair.

He, however, said offloading the 49 per cent share of Jalalabad Gas Company will be completed before December next as the audit and apopointment of an issue manager are expected to be completed very soon.

Another official in the same ministry said offloading process of another 25 per cent share of DESCO is in progress.

The investors are now facing shortage of securities. Only 421securities are listed on the two bourses.
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