Japanese companies have sought relaxed public issue rules to increase their investment in Bangladesh.
According to the existing initial public offering (IPO) rules, companies having minimum paid-up capital of Tk40 crore will have to be converted into public limited companies.
A Japanese delegation recently requested the Bangladesh Securities and Exchange Commission (BSEC) to exempt foreign companies and foreign joint venture companies from the provision as they argued this will attract large scale foreign investment not only from Japan, but also from other countries.
The delegation, led by JBCCI President and JETRO Chief Representative Kei Kawano, met BSEC Chairman M Khairul Hossain, said Japan Bangladesh Chamber of Commerce and Industry (JBCCI) in a statement yesterday.
The meeting was told that large scale Japanese investments are expected to come to Bangladesh soon following the recent mutual visits of the two Prime Ministers of Bangladesh and Japan, the statement said.
There are around 9,000 Japanese companies in Thailand and around 3,000 Japanese companies in Indonesia and compared to that, Bangladesh has only 223 Japanese companies.
“So, there is a huge potential of investment from large number of Japanese companies both in large and small scales.”
The delegation pointed out that large Japanese companies that are already in Bangladesh or planning to invest in Bangladesh are facing problem with BSEC requirements, where it mentions that if the paid up share capital exceeds Tk10 crore, any company needs to get BSEC approval for raising capital.
If the paid-up share capital exceeds Tk40 crore, it will have to be converted into a public limited company and if the paid-up share capital exceeds Tk50 crore, it will have to go for IPO.
In response to the proposal, the BSEC chairman assured that any Japanese owned or Japanese joint venture company (of any form), which will apply to BSEC for waiver of conversion to public limited company, will be given permission within three business days.
In future, no Japanese company or Japanese joint venture company will have to be converted into a public limited company if paid up share capital exceeds Tk40 crore and the companies will not have to go for public if the paid up share capital exceeds Tk50 crore, said the statement quoting BSEC chairman.
But private limited companies need to take approval from BSEC when its paid up capital exceeds Tk10 crore since it is a requirement of the rules.
