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Wednesday, June 17, 2009
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Offload 49pc share of Biman to NRBs

JS body suggests

A parliamentary standing committee yesterday recommended offloading 40-49 percent shares of Biman Bangladesh Airlines Ltd onto non-resident Bangladeshis (NRBs) to improve the financial strength of the national flag carrier and make it profitable.

The parliamentary body on the civil aviation and tourism ministry also asked the Biman management to lease three Boeing-777s for resuming the Dhaka-New York route and other long-haul routes, which are now suspended due to aircraft shortages.

During a meeting, it also asked Biman's new management to start "motivational programmes" for Biman staff so that they become more professional and Biman runs more efficiently.

Engineer Mosharraf Hossain, chairman of the standing committee, told reporters after the meeting, "Biman is facing capital shortage. The committee therefore unanimously recommended offloading Biman's 40 to 49 percent shares onto non-resident Bangladeshis."

Civil aviation and tourism minister and chairman of the board of directors of Biman Jamaluddin Ahmed and civil aviation secretary Hedayetullah Al Mamun were also present in the four-hour-long meeting held at the Jatiya Sangsad Bhaban.

Mosharraf said Biman would be able to accumulate between Tk 1,500 crore and Tk 2,000 crore selling the shares to NRBs.

Biman was turned into a public limited company in July, 2007 to stop huge losses every year and start making profit.

Biman, however, could not attain the desired improvements in the last two years during which cent percent of its shares were in the government's possession.

Biman still cannot maintain flight schedules thanks to shortage of aircrafts. Taking advantage of the situation, foreign airlines are capturing Bangladesh Biman's market share.

The committee also proposed including five major NRB shareholders in the 10-member board of directors of Biman while the government should directly appoint the other five.

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To bring private participation and dynamism Bangladesh Biman Company Limited 50% share capital should be off loaded to general public (25 % to nonresident Bangladeshi by pre-placement and 25% to resident Bangladeshi by IPO).A significant numbers of Directors from general public share holders are to be included in the Board of Directors of the company.

In share capital of Biman Ministry of Tourism and Civil Aviation may subscribe 30%; Ministry of Commerce may subscribe 10% and Ministry of Agriculture may subscribe 10% Scattered huge number of small savings can be gathered and utilized in large venture when shares are offered to subscribe by IPO method. Scarcity of capital is one of the problems in Bangladesh. IPO can help to reduce this problem to a significant extent.

Composition of Board of Directors: The Board of Director may be a policy making Board and would formed by at least 7 (seven) and maximum 9 (nine) Directors. Share holder Ministry of Tourism and Civil Aviation will nominate 3(three) Directors including Chairman. The share holder Ministry of Commerce and Ministry of Agriculture will nominate 1(one) Director each. The non-resident Bangladeshi subscribers will elect 2(Two) Directors amongst themselves and Resident Bangladeshi subscriber will elect 2 (Two) Directors amongst themselves .The share holder Ministries should not have eligibility to vote in the election of Directors from private subscribe shareholders.

The Managing Director of Bangladesh Biman will be Ex- Director of the Board and he/she will be the Chief Executive Officer of the company. The Managing Director will be a professional person and has to be selected by the Board of Directors for a period of 3(three) or 5(five) years on contractual basis.

If Memorandums and Articles of Association of Bangladesh Biman is amended incorporating the above features it would be able to keep command of government. At the same time, it would also bring significant private participation and dynamism in its management of the company to achieve the goals of Bangladesh Biman.

Md. Ashraf Hossain

: Md. Ashraf Hossain

 

 


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