Bangladesh Securities and Exchange Commission (BSEC) Chairman Masud Khan said that multinational and corporate companies operating in Bangladesh will be encouraged to get listed on the country's capital market.
"The companies will first be encouraged to come to the capital market voluntarily. However, if they do not, there is also an opportunity to exercise our legal authority in the public interest. They will be forced. They must come to the market."
Masud, head of Bangladesh's capital market regulator, spoke on Friday at a workshop for members of the Capital Market Journalists Forum (CMJF) in Narayanganj.
He said: "There are many multinational and corporate companies in Bangladesh. We will initially bring in companies that have assets worth Tk500 crore or annual income of Tk500 crore. We will scrutinize them."
In response to a question, he said, "You will see results within three months," referring to the start of the listing process.
The BSEC chairman also said that efforts would be made to bring several large and "flagship" companies to the capital market within the next six months to one year.
"We want them to come voluntarily. But if they do not come voluntarily, we also have a weapon at our disposal. Under the existing law, they can be compelled to come in the public interest. We will introduce a new definition in line with the law."
According to him, Section 28 of the securities law gives the regulator the authority to order specific companies to get listed "in the public interest." For this purpose, the definition of a "Public Interest Company (PIC)" will also be established through legislation.
Saying that institutional investment is necessary to deepen the capital market, he said the process of liberalizing investment through pension funds is under way.
"If institutional investment is absent, the capital market will remain stuck in the same miserable state it is facing now," he said.
Highlighting the legal advantages of bringing corporate companies into the capital market, including making it easier to transfer shares and ownership to the next generation, the BSEC chairman said: "Once listed, a company gains a corporate image and its value increases. Its market value is determined."
"A company can use this market value to acquire or merge with another institution. The next generation can easily take over ownership."
He said that, in addition, if one of the partners wants to leave the business, they can easily do so by selling their shares.
Masud said, "Disputes often arise among the owners of many private companies, causing businesses to break up into pieces. Legal disputes over inheritance are also occurring frequently.
"Once a company is listed, partners who do not want to remain in the business have the opportunity to exit by selling their shares."
The BSEC chairman also announced plans to introduce "extended audits" to simplify the initial public offering (IPO) process.
He said, "It will not be enough to check whether the accounts in the financial statements are accurate. It will also be necessary to verify whether information regarding the company's land, machinery, inventories, receivables and suppliers is actually correct."
Under the proposed system, auditors will certify the accuracy and authenticity of the assets and financial information submitted by companies applying for an IPO.
This, he said, would make the stock exchanges' IPO verification process faster.