bdnews24.com :
Companies with predominant family ownership in Bangladesh are providing less information in their financial statements, says a research paper.
Mizanur Rahman of Dhaka University’s department of Accounting & Information Systems, makes this observation on the basis of his analysis of 94 companies listed on the Dhaka Stock Exchange.
His research paper “Ownership Concentration and Corporate Disclosures in Bangladesh” was presented at an international conference on accounting for capital market governance on Sunday.
“I found that in Bangladesh companies, who have concentrated family ownership are less likely to provide important information in financial statements, because the management of such companies are unable to take independent decisions on account of ownership pressures,” Mizanur Rahman said in his paper.
“Separation between ownership and management is increasingly blurred.”
The research paper claims 34 percent of the companies failed to meet the minimum 20 percent disclosure requirements.
Such family-run companies have failed to disclose key financial elements like intangibles, provisions, accounting policy, tax revenue, financial obligations and costs, operating assets, operating liabilities and operating expenses, says the research paper by Rahman.
“Bangladesh Securities and Exchange Commission (BSEC) do not have the required resource and human capital to perform this audit,” the paper said.
But Monowar Hossain, a chartered accountant and a BSEC consultant, claimed during discussions on Rahman’s paper that after 2012, the level of corporate disclosures has improved.
Dr M Baki Khalili of the Centre for Corporate Governance and Finance Studies (CCGFS) of Dhaka University says family ownership is not the problem.
“Concentration of ownership in a family is not the problem. The weakness lies in weak enforcement structures and capabilities and businesses take advantage of that.”
Baki Khalili also questioned the practice of conglomerates in Bangladesh to have their own brokerage houses, as is the case with Square Group or Beximco Group.
Companies with predominant family ownership in Bangladesh are providing less information in their financial statements, says a research paper.
Mizanur Rahman of Dhaka University’s department of Accounting & Information Systems, makes this observation on the basis of his analysis of 94 companies listed on the Dhaka Stock Exchange.
His research paper “Ownership Concentration and Corporate Disclosures in Bangladesh” was presented at an international conference on accounting for capital market governance on Sunday.
“I found that in Bangladesh companies, who have concentrated family ownership are less likely to provide important information in financial statements, because the management of such companies are unable to take independent decisions on account of ownership pressures,” Mizanur Rahman said in his paper.
“Separation between ownership and management is increasingly blurred.”
The research paper claims 34 percent of the companies failed to meet the minimum 20 percent disclosure requirements.
Such family-run companies have failed to disclose key financial elements like intangibles, provisions, accounting policy, tax revenue, financial obligations and costs, operating assets, operating liabilities and operating expenses, says the research paper by Rahman.
“Bangladesh Securities and Exchange Commission (BSEC) do not have the required resource and human capital to perform this audit,” the paper said.
But Monowar Hossain, a chartered accountant and a BSEC consultant, claimed during discussions on Rahman’s paper that after 2012, the level of corporate disclosures has improved.
Dr M Baki Khalili of the Centre for Corporate Governance and Finance Studies (CCGFS) of Dhaka University says family ownership is not the problem.
“Concentration of ownership in a family is not the problem. The weakness lies in weak enforcement structures and capabilities and businesses take advantage of that.”
Baki Khalili also questioned the practice of conglomerates in Bangladesh to have their own brokerage houses, as is the case with Square Group or Beximco Group.
