The cabinet yesterday approved a draft law allowing the aviation ministry to keep its control over Biman, even though the national flag carrier was turned into a public limited company in 2007 to make it profitable.
The cabinet at a meeting in principle approved the draft of Bangladesh Biman Corporation (Repeal) Bill, 2020 as the existing Bangladesh Biman Corporation Ordinance 1977 is no longer required since Biman was turned into a public limited company (PLC).
The meeting was chaired by Prime Minister Sheikh Hasina. The prime minister joined the virtual meeting through a videoconference from her official residence the Gono Bhaban while other cabinet members joined from the secretariat.
On July 23, 2007, during the regime of the military-backed caretaker government, Bangladesh Biman was turned into a PLC, starting anew its journey with the name Biman Bangladesh Airlines Ltd.
Under the Companies Act of 1994, Biman was supposed to run independently and take its own decisions.
After the elected government assumed power, there were allegations that the respective ministry was interfering in Biman’s activities for financial gains and to get undue benefits.
There are also widespread allegations of corruption and irregularities against Biman and that the national flag carrier is suffering from a lack of accountability and transparency.
Several Biman officials said that Senior Secretary of Civil Aviation Ministry Mohibul Haque has been trying to turn the tide as he has taken various measures to eliminate corruption and ensure accountability.
The chairman of the Biman board of directors is Sajjadul Hassan, former senior secretary of the Prime Minister’s Office. Secretaries of different ministries form the majority of the 13-member Biman Board.
Moreover, 100 percent of Biman’s shares are owned by the government.
A high-placed official of the Civil Aviation Ministry yesterday told The Daily Star that thus far, the ministry informally had the authority in forming and dissolving the Biman board, the highest authority when it comes to taking decisions about Biman.
“But the cabinet today [Monday], while approving the draft of Bangladesh Biman Corporation (Repeal) Bill, 2020, included a provision, formally empowering the ministry in this regard,” said the official, who preferred not to be named.
He also said while Biman will be operated under the Companies Act, the power to dissolve and reorganise the board of directors will remain in the hands of the government.
Besides, the ministry will have the authority to take any action against Biman.
According to the draft Bangladesh Biman Corporation (Repeal) Act, the government will be able to take necessary steps for efficient management regardless of what remains in the Companies Act.
The ministry will be able to dissolve the board and have the power to terminate, change and amend contracts of different management treaties of Biman.
Talking to The Daily Star, Senior Secretary Mohibul Haque said as Biman is a government-owned company, it will be controlled by the relevant ministry.
He said there are several companies under Petro Bangla and Bangladesh Petroleum Corporation which are also controlled or run by the relevant department.
“As there is no such department to run Biman, the Civil Aviation Ministry will look after it,” said Mohibul Haque.
Aviation experts and a former managing director and CEO of Biman said the government’s move does not match with the spirit of the Companies Act.
“Biman is a commercial organisation and the government should not interfere in running its activities,” said a former MD of Biman, wishing anonymity.
When turning Biman into a PLC, it was decided that Biman would gradually offload all its shares to the public. But in the last 13 years, Biman could not do so and all shares remain in the hands of the government.
According to the Companies Act, the annual general meeting is the highest decision-making body and the shareholders take policy-related decisions there.
But the government owns all the shares in the national airliner. Although Biman is a public limited company, all shares remain in the hands of the government and, showing various grounds, the government is not off-loading the share, observers said.
So far, Biman has been operated in accordance with the 1977 ordinance. The High Court, however, declared illegal all ordinances, rules and regulations issued during the military regime between August 15, 1975 to April 11, 1979.
But later, in another HC rule in 2013, a few ordinances, including the Biman one, were kept active and the government was asked to enact a fresh law in this regard, Mohibul Haque told The Daily Star.
When transforming Biman into a public limited company in 2007, a section was addedin the Biman ordinance 1977.
Mohibul Haque said as Biman will run according to the Companies Act, the government has moved to repeal the 1977 ordinance.
Although the Bangladesh Biman Corporation Ordinance 1977 is being repealed, the relevant functions described in the ordinance is bestowed upon the company, said Cabinet Secretary Khandker Anwarul Islam at a press briefing after the meeting.
In yesterday’s meeting, the cabinet also approved a draft of the Local Government (City Corporation) (Amendment) Bill, 2020 under which election to any city corporation will have to be held within three months instead of the existing six months before the expiry of its tenure.
“Six months or 180 days is a long time… Even after taking oath, they [elected representatives] have to wait to take over charge. So, the bill was placed bringing a change to it. Now, the election will have to be held within three months [90 days],” said Khandker Anwarul Islam.
As per the draft law, he said, charge will be handed over to the newly-elected representatives within 15 working days after they take oath.
“They [newly-elected representatives] will have to sit in their maiden meeting within 15 days after taking oath and thus the former corporation will be abolished with the arrangement of the meeting,” he said.
According to the proposed law, mayors and councillors of city corporations will be able to enjoy a one-month leave every year instead of the existing three months.