BANGLADESH Law and Practice Contributed by: A B M Nasirud Doulah and Amina Khatoon, Doulah & Doulah
cern under this structure. Like amalgamation, this may require approval from the court. Joint Venture with Retained Control In certain industries where the scope of foreign investment is limited up to a certain threshold, foreign investors maintain shares up to a permit - ted threshold but also retain contractual author - ity to nominate the majority of the board mem - bers to have control. 2.2 Primary Regulators Bangladesh Competition Commission The Competition Commission of Bangladesh, constituted under the Competition Act, 2012, is responsible for supervising M&A activity in Bangladesh. However, the provisions including merger clearance set out in the Competition Act are currently operating in reactive mode only upon complaint from third parties pending the incorporation of the underlying competition rules needed to impose proactive measures such as merger filing. Office of the Registrar of Joint Stock Companies and Firms This Office regulates incorporation and all cor - porate governance requirements for incorpo - rated companies in Bangladesh. In addition, it maintains the share register of incorporated companies in Bangladesh. Non-listed compa - nies need to record any new allotment of shares by way of filing Form-XV. A change of share - holder is recorded by way of filing Form-117 and a change in director is recorded by way of filing Form-XII and the relevant consents. Stock Exchanges The two stock exchanges of Bangladesh, ie, Dhaka and Chittagong Stock Exchanges, main - tain the trading platforms, issue trading right entitlement certificates (brokerage licences) as
per the Bangladesh Securities and Exchange Commission (BSEC) rules, and supervise certain corporate governance aspects of public listed companies. Issuers need to adhere to relevant rules to be listed in the corresponding exchange house. In addition, in the case of a substantial acquisition of shares, it is possible to unfreeze relevant shares and/or give effect to such sub - stantial acquisition as per the BSEC (Substan - tial Acquisition of Shares and Takeovers) Rules, 2018 as long as such transfer does not result in a reduction of the shares held by the sponsors of the directors of the issuer below 30%. BSEC The BSEC is the main regulator of publicly list - ed securities, including shares and other debt securities, with the power of enforcement of the underlying rules and regulations. Among other governance matters, it establishes the directives and rules related to public issues, issues licenc - es to brokerage firms, depositories and other market participants, and approves initial pub - lic offerings or direct listings of securities/debt instruments. In the M&A landscape, approval from the BSEC is needed to implement any deal which may result in reducing the shares held by the sponsors of the directors of the issuer below 30%. Bangladesh Bank It supervises the foreign exchange-related aspects of M&A deals such as the valuation of share transfer deals involving non-residents, repatriations and operational aspects of cross- border investment in public securities. In addi - tion, companies need to keep it updated about foreign investment, debt and beneficiary own - er-related information by way of filing periodic reports. It also imposes clearance requirements from lender banks for changes in the board or shareholding of any director in a company.
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