Listed firms seek increased tax benefits, logistics privileges to attract MNC IPOs

Bangladesh Association of Publicly Listed Companies (BAPLC) President and Berger Paints Bangladesh Managing Director Rupali Haque Chowdhury said if multinational or foreign companies operating in Bangladesh are to be brought into the capital market, they must be offered an attractive package.

He said, "Previously, the tax gap between listed and non-listed companies was 15%. It has now been reduced. If it is more beneficial for companies to remain outside the capital market rather than joining it, why would they choose to be listed? For this, listing on the capital market of multinational companies must be made attractive."

He made these remarks at the "CMJF Talk" organised by the Capital Market Journalists Forum (CMJF) at Paltan in the capital today. CMJF President Golam Samdani Bhuiyan and General Secretary Abu Ali were present.

Rupali Haque Chowdhury has served as the president of the Foreign Investors' Chamber of Commerce & Industry (FICCI) for three terms.

According to FICCI's website, the organisation has 188 member companies. However, only 13 of them are listed on the stock market.

When asked about her experience regarding why foreign companies do not enter the capital market, she said, "They need to be approached, and the capital market must be made attractive for them. Company laws are simpler for non-listed companies compared to listed ones."

Rupali continued, "When Berger was listed, the tax gap between listed and non-listed companies was 15%. Now, it has been reduced. Company laws should be evaluated for both listed and non-listed companies. I am not just talking about taxes."

She believes that a level-playing field must be created in company laws for both listed and non-listed companies.

Keeping businesses separate from political affiliations  

Rupali said, "The owner or owners of an industrial enterprise may have political affiliations. However, their business should remain untouched and unaffected."

As a reason, she said, "An institution is established, providing employment to many people. Therefore, for the country's interest, that institution must be protected. Whether it is small or large, employment is being provided to some people, and we must remain aware of that."

Regarding the country's business and investment situation, Rupali said that Covid-19 was a major blow behind the decline in investment in the country. "This blow has severely affected many small or SME companies. While the larger ones were able to continue, the smaller ones faced significant losses. After that, the Ukraine-Russia war and political instability have further disrupted business."

She said that the country's fiscal policy should include both revenue generation and infrastructure development. 

Rupali said, "Infrastructure development must be aligned with that of other competing countries. While the overall communication infrastructure in the country is good, there are significant complexities in places like the Kanchpur Bridge. In these areas, smooth efficiency in communication must be achieved. The supply chain must be made world-class."

She further said, "Due to the lack of predictability in law, we are unable to make anything predictable in financial planning. At the beginning of this year, supplementary duties and VAT were reintroduced, which has caused many companies' income and expenses to become disordered."

In response to a question, she said that increasing all types of supplementary duties, including port charges, would not be appropriate. "If these duties are increased at this moment, businesses will not be able to bear the pressure of inflation. We, at BAPLC, strongly oppose the increase in duties."

Emphasising that getting listed of the companies should be offered attractive, she said, "If they do not receive good benefits from being listed, why would they come to the IPO? They will raise capital directly from the bank instead."

Some listed companies used to report much lower non-performing loans in their financial statements instead of showing the actual figures. These audit reports were conducted by CA firms. 

In response to a question regarding the accountability of CA firms, Rupali said corruption cannot happen if it doesn't have the blessing of the regulatory body. 

The audit firm that reported such irregularities should have its licence revoked, she said, adding that a precedent must be set, and those involved in such corruption should face some form of punishment.

Rupali said, "My regulatory body must be one that punishes those who do wrong. People work for two reasons: one is incentive, and the other is fear. So, if you don't take any action, those individuals will just keep getting more opportunities."