1.1 Generally
a) The Acquisition will have to be approved by a Board resolution. A Board meeting can be initiated by any director or persons so authorized by the Articles of Association of the Company. There is no mandatory notice period for calling a Board meeting and such period will be in accordance to the provisions for Board meeting notices stipulated in the Articles of Association. However such notice may be shorter than the period stipulated in the Articles of Association provided that all directors agree to a shorter notice period. Section 95 provides that notice shall be required to be given to all Directors in Bangladesh. Provided that Schedule 1 of the Companies Act, 1994 is adopted and unless otherwise stipulated in the Articles of Association, the quorum for the meeting is three (3) directors and resolutions are passed by the decision of the majority directors.
b) In addition to the Board approval, the Directors of the Company has to get the consent of the company concerned in Annual general meeting before selling or disposing of the undertaking of the company (Section 107 (a) of the Companies Act 1994). An Annual General Meeting may be called by 14 (fourteen) days notice in writing or by shorter notice if all members entitled to attend and vote agree in writing.
The Board resolution will also authorize one or more of its officers to execute the MOU and all other agreements in relation thereto.
1.2 We will be required to review the up-to-date Memorandum and Articles of the Company to ensure that there is no change in the approval process and timetable given above.
1.3 If the above approvals are not obtained then unless the sale is ratified by the Board the sale of the assets by the Company will be void provided that such transaction is not ultra vires.
2. The Assets transfer relates to:
i) employees
ii) fixed assets
iii) leases
Employees – No approval is required for the transfer of employees to Buyer. Fresh contracts will have to be executed between each transferred employee and the buyer. Under Bangladesh labour laws, employees are divided into “workers” and “non-workers”. The distinction between the two categories depends on the type of work rendered by the employee. The non-worker renders supervisory, management or administrative services and workers are not involved in such functions. The legal relationship between a non-worker and the employer is based solely on the contractual terms between the two. With regard to workers, the contractual terms of the employment must comply with the various Bangladesh labour laws.
Fixed assets – if the sale involves any offshore remittance, then prior approval of such remittance may have to be obtained from Bangladesh Bank under the Foreign Exchange Regulation Act, 1947. With regard to inward remittance according to Para 2, Chapter 8 of Bangladesh Bank “Guidelines for Foreign Exchange Transactions” remittances equivalent to US$ 2000 and above should be reported to Bangladesh Bank. If the sale of the fixed assets involves remittance less than US$ 2000 then it does not have to be reported to Bangladesh Bank. If the Remittance is more than US$ 2000 then the approval of Bangladesh Bank will be needed.
If the fixed assets are encumbered then the charge(s) will have to be vacated with the approval of the relevant bank(s)/financial institution(s).
Leases – if the sub-leases involve any offshore remittance, then prior approval of such remittance may have to be obtained from Bangladesh Bank under the Foreign Exchange Regulation Act, 1947. With regard to inward remittance according to Para 2, Chapter 8 of Bangladesh Bank “Guidelines for Foreign Exchange Transactions” remittances equivalent to US$ 2000 and above should be reported to Bangladesh Bank.
Depending on the lease agreement, approval from the lessor may be required before sub-leasing.
2.2 For remittance of funds, if prior approval is not obtained from Bangladesh Bank, such funds will be stuck up in Bangladesh. The Punishment for not seeking approval is imprisonment up to 2 years or a fine or both. Any currency etc in respect of which the contravention has taken place would be confiscated.
3.1 GSK will be allowed to sub-lease the 11 depots to the Buyer provided that they are empowered to do so under the lease agreement and if any conditions are attached, such conditions can be fulfilled. Otherwise, the approval of the Lessor will be required for sub-leasing the 11 depots to the Buyer.
3.2 The lease agreements will be required to ascertain if the GSK is entitled to sub-lease.
3.3 A lease having a tenure of more than 01 (one) is required to be registered with the Sub-Registrar of lands having jurisdiction of the area where the demised premises is situation under Section 17(d) of the Registration Act, 1908.
3.4 Stamp duty in relation to registration of sub-lease is as follows:
a) Where the sub-lease purports to be for a term exceeding one year but not exceeding five years the stamp duty is 2% of the value of consideration for the amount or value of the average annual rent.
b) Where the sub-lease purports to be for a term exceeding five years but not exceeding ten years the stamp duty is 10% of the value of consideration equal to the amount or value of the average annual rent reserved.
c) Where the sub-lease purports to be for a term exceeding ten years but not exceeding twenty years the stamp duty is 10% of the value of consideration equal to twice the amount or value of the average annual rent reserved.
d) Where the sub-lease purports to be for a term exceeding twenty years but not exceeding thirty years the stamp duty is 10% of the value of consideration equal to three times the amount or value of the average annual rent reserved.
e) Where the sub-lease purports to be for a term exceeding thirty years but not exceeding one hundred years the stamp duty is 10% of the value of consideration equal to four times the amount or value of the average annual rent reserved.
4.1 No.
4.2 In general with regard to the acquisition of fixed assets and leases there is no consultation requirement under law with any employees, works council, trade union or government entity.
With regard to the transfer of the employment contracts, the employees will have to agree to work for the buyer.
The transfer can take place in two ways: i) termination of the existing service contract and re-hire by a new appointment letter issued by the buyer, or ii) transfer the service by way of novation. Either way are legally effective and enforceable however if the employee is a worker, then the first course will require payment of compensation to the terminated worker by the seller under law.
4.3. N.A.
4.4. As stated above if the employee is a worker, then the first course will require payment of compensation to the terminated worker by the seller under law.
5.1 Regarding the Acquisition of employees no stamp duty or tax is payable. Regarding the Acquisition of Fixed Assets, the Asset Purchase Agreement is subject to a stamp duty of Tk. 150. And the Stamp Duty for the Acquisition of Sub-lease is given above in paragraph 3.4.
5.2 No.
6.1 No other legal obligations under Bangladeshi Law.
6.2 No.
6.3 No.