Businesses have urged the government to pay special attention before passing amendments to the Companies Act 1994, enabling a pro-business ecosystem by incorporating automation, technology, and company benches in the High Court in line with the evolving global context.
DCCI President Barrister Md Sameer Sattar, and other speakers made the call at a seminar on “Reform of Companies Act 1994,” organised on Saturday by the Dhaka Chamber of Commerce and Industry (DCCI) in the capital.
Commerce Ministry Senior Secretary Tapan Kanti Ghosh attended the seminar as chief guest, while Supreme Court Advocate Barrister Rashna Imam presented the keynote.
Rashna highlighted few reform proposals such as the need for a robust legal framework for merger and acquisition to fill the legislative vacuum, and recommended making winding up procedures easier for companies.
She also pleaded for mandatory provision of alternative dispute resolution (ADR) or mediation to be inserted in the new Companies Act.
“Independent directors should be mandatory for publicly unlisted companies for better transparency, and provision of appointment, qualifications, roles and responsibilities of company secretary for all companies needs to become mandatory as well,” Rashna added.
DCCI President Sameer Sattar said, “The century old Companies Act is limited to private and public limited companies, and is unable to cater cross-sectional and diverse businesses and competitiveness of the private sector in the changing geo-economic business dynamics.
“Considering the importance of reform, in 2020, a few amendments were made in the ease of doing business. Though we feel further reforms are needed. The draft was not seen by the stakeholders, but we hope that the government will consider sharing this before it is passed.”
He also recommended incorporating full-fledged automation and maximum flexibility to use technology within the framework, provision of Alternate Dispute Resolution (ADR) for speedy dispute resolution, and provision of incorporating Intellectual Property Rights (IPR).
Sattar pleaded for a separate section on Merger and Acquisition that needs to be incorporated on par with global practice. Lastly, he stressed on increasing the Registrar of Joint Stock Companies (RJSC) capacity to better monitor and enforce company law compliance and governance.
Commerce Ministry Senior Secretary Tapan Kanti Ghosh said, “The revised Companies Act is now at our ministry for necessary vetting and scrutiny. Soon it will be sent to the Cabinet Division for appraisal.
“Besides, I request that the businesses not focus on profits only, rather, think about the community, society and well-being of mankind while doing business.”
Tapan then said, “Regarding automation of RJSC, the software will be in place by December this year. We do not want to make businesses complicated, rather less interference brings more efficiency in the end, and we believe in this philosophy.
“Too much restriction by the law will not bring any positive result.”
He agreed that not all the companies are the same in size, so the government has to give support to the SMEs, as this category is the lifeline of Bangladesh’s economy. Tapan later emphasised that Intellectual Property Rights (IPR) are very crucial for ensuring fair competition in businesses.
Institute of Cost and Management Accountants of Bangladesh (ICMAB) President Md Abdur Rahman Khan, FCMA said, “Reform of the Companies Act will help ease the business processes. The law needs to be updated with the changing dynamics of world businesses.
“The Companies Law should be amended in every two to three years to make it more subjective with businesses. All companies are not the same, so in terms of implementation of regulations, that should be kept in mind.”
IFC Bangladesh Country Manager Martin Holtmann said, “The current act is not fit for modern financing instruments. First of all, we need to reduce the risks. We need to formalise the informal sector outside the data.
“In recent past Bangladesh did a tremendous improvement in terms of economy. If Bangladesh can make radical changes in the Companies Act it will bring enough confidence among businesses.”
Chairman and Managing Director of Unilever Bangladesh Zaved Akhter emphasised on integration and compliance of Companies Act. He also underscored the need of implementing ADR for any business dispute settlement.
In the open discussion session, other speakers also urged for effective and timely implementation of Companies Act to ease the business process, aligned with modern rules and regulations.
Md Shahadat Hossain, council member and former president of the Institute of Chartered Accountants of Bangladesh (ICAB); Md Abdus Samad Al Azad, register (joint secretary), office of the Register of Joint Stock Companies and Firms (RJSC); DCCI Senior Vice President SM Golam Faruk Alamgir (Arman); and Vice President Md Junaed Ibna Ali were present at the seminar.