Metro rail company functioning without paid-up capital

The metro rail company has been functioning for the last five years without paid-up capital as this important provision is absent in the official document of the organisation.

Sources said in absence of paid up capital, the Ministry of Finance (MoF) has already rejected the prayer of Dhaka Mass Transit Company Limited (DMTCL) to sanction Tk 4.95 billion.

The company was formed with Tk 100 billion authorised share capital under memorandum of association (MoA).

They said the letter signed by managing director of DMTCL had no mention about utilisation of the fund sought.

"Limited company cannot be formed without paid up capital. There is no mention about it in the memorandum of association of DMTCL, nor the letter cleared at what form total taka was sought for the company," said an official.

He said DMTCL must explain the ministry how the government will pay the sought money-whether as equity, loan or grant under the paid up capital.

The DMTCL was formed on June 03, 2013 as the cent percent government owned company showing Tk 100 billion authorised share capital to plan, implement, operate and maintain metro rails in the city. According to revised strategic transport plan, a network of more six metro rails has been planned to develop by 2030.

Sources said the DMTCL has so far been implementing four metro rail projects named mass rapid transit line 6, 1 and 5-north and 5-south with the financial support of development partners and the fiscal budgets.

Initially the first metro rail project-MRT 6 - was under a project of Dhaka Transport Coordination Authority. But with the formation of the company, all ongoing projects have been under DMTCL's jurisdiction.

Over 200 DMTCL's staff are now getting salary under company structure which is three to four times higher than the government structure.

Admitting the lacking in the MoA, a senior DMTCL official, however, said it was updated in the joint stock company stating Tk 5.0 billion as paid up capital of the company.

He said DMTCL has already sought Tk 5.0 billion from the MoF as paid up capital and received only Tk 50 million.

So the rest Tk 4.95 billion was sought recently, the official said admitting receipt of the MoF's letter with the refusal of paying Tk 4.95 billion.

According to the information on the DMTCL website, it has so far held 32 board meetings since November 16, 2014 and executed 36 decisions out of 39 of the board.

The company has published annual reports for the fifth times since 2014 but none contains indication about paid up amount and expenditure.

It showed the budget it received under the annual development programme for the above mentioned metro rails.

But the latest report of 2018-2019 showed the company performance very satisfactory with 98 and 100 per cent marks at annual performance agreement and integrity respectively.

It received 30 audit objections from Foreign Aided Project Audit Directorate (FAPAD) till 2017 of which 13 were resolved till June 2019.

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