Summary:

A more efficient, transparent, and business-friendly regulatory environment in Bangladesh is being recommended by the Dhaka Chamber of Commerce & Industry (DCCI) through the establishment of a specialized High Court division that will handle company disputes within a period of 120 days. 

Content:

A recent seminar on “Reform of Companies Act 1994” was held at the DCCI auditorium in Motijheel, Dhaka. During the seminar, Barrister Rashna Imam of the Supreme Court suggested that there should be dedicated benches for resolving company disputes. Currently, there are two benches that handle both company and other types of cases, which can lead to delays and confusion. Having dedicated benches for company disputes would help streamline the process and make it more efficient. 

Resolving issues arising from companies’ failure to hold annual general meetings could be handled by the Registrar of Joint Stock Companies instead of involving the courts, suggested a speaker at a recent seminar. She emphasized the need to resolve such cases within a 120-day time frame instead of the current 4-6 months. Barrister Rashna Imam highlighted the importance of a strong legal framework for mergers and acquisitions to address existing legislative gaps. She also recommended the inclusion of alternative dispute resolution (ADR) or mediation provisions as mandatory in the new Companies Act. 

In a bid to improve transparency, Barrister Rashna Imam has proposed that “Independent Director” positions be made mandatory for publicly unlisted companies. Additionally, she has called for mandatory Corporate Social Responsibility (CSR) for all companies to promote better corporate governance. To ensure accountability, the lawyer has suggested that auditors be registered with the Financial Regulatory Council (FRC) and has recommended the inclusion of penalty provisions for non-compliance. Furthermore, in order to reduce the compliance burden on very small companies, Imam has proposed that annual audit reports should not be mandatory for them. 

Acknowledging the different sizes of companies, Tapan Kanti Ghosh, Senior Secretary of the Ministry of Commerce, emphasized the government’s support for SMEs as they are a vital part of the economy. He informed that the revised Companies Act is currently being scrutinized by the Ministry of Law and will soon be presented in Parliament after Cabinet Division appraisal. Additionally, Ghosh highlighted that the Registrar of Joint Stock Companies software will be automated by December. In his welcome address, DCCI President Barrister Md Sameer Sattar stressed the urgent need for Companies Act reform to boost business confidence and attract foreign direct investment. He proposed comprehensive automation, technological flexibility, and Alternate Dispute Resolution (ADR) provisions to ensure speedy dispute resolution, along with the inclusion of Intellectual Property Rights (IPR). He also called for a dedicated section on merger and acquisition that aligns with global practices and underscored the importance of enhancing RJSC’s capacity for effective monitoring and enforcement. Martin Holtmann, country manager, IFC Bangladesh, pointed out that the current Companies Act is inadequate for modern financing instruments and suggested a radical overhaul to instill confidence in businesses. Zaved Akhter, chairman and managing director of Unilever Bangladesh, emphasized the importance of Company Act compliance and the implementation of ADR to resolve business disputes. 

Picture and Article Sources: The Business Standard