DCCI calls for dedicated HC bench to handle company cases
DCCI recommends easier winding up procedures for companies
The Dhaka Chamber of Commerce & Industry (DCCI) has recommended the introduction of a dedicated High Court bench for resolving company disputes within a 120-day timeframe for a more efficient, transparent, and business-friendly regulatory environment in Bangladesh.
The recommendation was put forth during a seminar on "Reform of Companies Act 1994", held at the DCCI auditorium in Motijheel, Dhaka.
"We have two separate benches for company dispute resolution but these two benches also deal with other cases," said Barrister Rashna Imam of the Supreme Court.
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Instead of involving the courts, the Registrar of Joint Stock Companies could be empowered to resolve issues arising from companies' failure to hold annual general meetings, she said as an example.
"Currently, a simple case disposal takes 4-6 months, which should be resolved in a 120-day time frame," she told The Business Standard after the seminar.
Barrister Rashna Imam underscored the importance of a robust legal framework for mergers and acquisitions to fill existing legislative gaps and advocated for the mandatory inclusion of alternative dispute resolution (ADR) or mediation provisions in the new Companies Act.
Additionally, she proposed making "Independent Director" mandatory for publicly unlisted companies to enhance transparency.
In terms of corporate governance, Barrister Rashna Imam called for mandatory Corporate Social Responsibility (CSR) for all companies.
She also suggested that auditors be registered with the Financial Regulatory Council (FRC) to ensure accountability and recommended the insertion of penalty provisions for non-compliance.
To reduce the compliance burden on very small companies, the lawyer proposed that annual audit reports should not be mandatory for them.
Tapan Kanti Ghosh, Senior Secretary of the Ministry of Commerce, acknowledged the diverse sizes of companies and stressed government support for SMEs, considering them vital to the economy.
He noted that the revised Companies Act is undergoing scrutiny at the Ministry of Law and will soon be presented in Parliament after Cabinet Division appraisal.
He also highlighted the upcoming automation of the Registrar of Joint Stock Companies software by December.
DCCI President Barrister Md Sameer Sattar, in the welcome address, emphasised the urgent need for Companies Act reform to boost business confidence and attract foreign direct investment.
He proposed comprehensive automation, flexibility in technology use, Alternate Dispute Resolution (ADR) provisions for speedy dispute resolution, and inclusion of Intellectual Property Rights (IPR).
He also called for a dedicated section on merger and acquisition aligned with global practices and underscored the importance of enhancing the Registrar of Joint Stock Companies' (RJSC) capacity for effective monitoring and enforcement.
Martin Holtmann, country manager, IFC Bangladesh, highlighted the inadequacy of the current Companies Act for modern financing instruments and suggested a radical overhaul to instill confidence in businesses.
Zaved Akhter, chairman and managing director of Unilever Bangladesh, emphasised Company Act compliance and the implementation of ADR for resolving business disputes.
