Grants to Obtain Corporate Finance Wings

The exchange will create separate departments in Corporate Finance this month in accordance with a directive of the regulator of stock markets to ensure corporate governance and to bring more transparency among listed companies.

The initiative, designed to make concessions of principal regulator, will also help investors obtain financial information or disclosure of the company with greater precision.

Activities in the departments that will begin next month, as Dhaka and Chittagong stock exchanges have agreed to follow the advice of the Securities and Exchange Commission.

The controller and two bags of yesterday, sitting in a meeting, chaired by ESA Khairul Hossain M, where the bags have decided to create corporate finance departments. SEC Commissioners, and the presidents and CEOs of stock exchanges, and were present at the meeting.

The major task of the departments would be examining financial reports submitted by the listed firms, which are required to disclose financial statements in every three months.

There have been allegations that many listed companies inflate financial reports by showing higher earnings and profits, especially when they submit un-audited quarterly reports. But, when the reports are annualised and audited, huge anomalies are detected.

Another task of the corporate finance departments will be to check whether the listed companies are complying with the corporate governance guidelines set by the SEC.

The departments will also examine the existing listing rules.

Prior to the launch of the new wings, the bourses will have to appoint professional accountants and financial analysts so they can efficiently detect any financial jugglery in the statements.

The move will also lower the practices of financial manipulation and increase transparency and accountability, the regulator said.

“The corporate finance departments will report to the commission on their works and findings on a regular basis,” Saifur Rahman, the spokesman and an executive director of the SEC, told journalists after the meeting.

Presently, there is no corporate finance division at the bourses, and the work on corporate finance till date was done on a piecemeal basis.

“If we can address the corporate disclosures and corporate governance issues properly, the investors will get the highest benefit with the access to more accurate information,” said Fakhor Uddin Ali Ahmed, president of Chittagong Stock Exchange.

He was seen on many occasions stressed that the decision or the information was disclosed to the secondary market, another seven days before the board of directors of listed companies, he said.

“Corporate Finance Departments of grants not only address the issue, but whether listed companies comply with corporate governance standards,” said CSE President.

“If we find irregularities reported to the SEC and the regulator will take action,” he said.