MNCs must come to capital market within a year BSEC Chairman

Multinational companies (MNCs) doing business in Bangladesh will have to come to the capital market, Bangladesh Securities and Exchange Commission (BSEC) Chairman Masud Khan said on Friday.

He has expressed optimism that significant changes will take place in the country’s capital market within the next year as the regulatory body is working on long-term plans to make the market deeper, more disciplined, transparent, and fair.

The securities regulator will initially encourage large local and multinational companies to list voluntarily, but it also has the legal authority to compel them to do so in the public interest within the next six to twelve months, he said.

He was speaking at the opening of a two-day workshop on ‘Capital Market Products and Rules’ organised by the BSEC for members of the Capital Market Journalists Forum (CMJF) at a resort in Narayanganj.

BSEC Chairman said Bangladesh has many large local and multinational companies, and bringing such companies to the market is essential for the development of the capital market.

The commission will seek to bring several large and flagship companies to the market within the next six months to one year, he said.

The BSEC chairman said securities laws provide scope for directing certain companies to list in the public interest.

The definition of Public Interest Company (PIC) will also be incorporated into the law to facilitate such measures.

Khan urged large companies to consider listing, saying it would strengthen their corporate image and establish a market-based valuation.

Such valuation could help companies in acquisitions and mergers, while existing shareholders could exit their businesses more easily by selling shares through the stock market, he said.

He also highlighted succession-related problems faced by family-owned businesses.

With generational changes, disputes among owners often lead to the fragmentation of private businesses. Listing can provide an exit route for shareholders who no longer want to remain involved in the business, he said.

The BSEC is also working to introduce direct listing and a hybrid listing mechanism to bring large companies to the market more quickly.

Under the proposed hybrid mechanism, a company would be able to raise fresh capital through an IPO while listing some portion directly listing existing shares through another.

The BSEC chairman said the commission is planning to introduce an ‘extended audit’ mechanism to streamline the IPO process.

Under the proposed system, auditors would not only verify the accuracy of financial statements but also physically verify a company’s land, machinery, inventories, receivables and supplier information.