EghtesadOnline: Tehran City Council ratified a preliminary plan based on which Tehran Municipality will be obliged to offer shares of its subsidiary companies on the stock market.
The direct listing plan aims to improve financial transparency of TM-affiliated companies, streamline financial structure and improve oversight over their finances.
It also is expected to substantially downsize the organizational structure of the municipality and improve its performance, according to Financial Tribune.
Commenting on the TCC decision, Bahare Arwin, a member of the council’s board of directors, said “this obliges the municipality to draft and present a bill to the TCC in three months,” IRNA reported.
Welcoming the plan, Majid Farahani, another member of TCC, said listing TM subsidiaries in the stock market would help improve openness, responsibility and performance.
“The stock market sets stringent conditions on companies wanting to be listed. This will compel municipal companies to reach a higher level of quality in terms of profit-making, financial transparency and productivity to be eligible for listing in the stock market”.
Managing director of Tehran Stock Exchange, Ali Sahraee, confirmed that there have been preliminary negotiations between the TM and his organization.
Elaborating on companies that would be eligible to enter the market, Sahraee said profit-making firms with a promising financial outlook can be listed.
“If the selected TM companies have the necessary features they would be accepted in the market”.
He further added, “We welcome the presence of such companies in the bourse and wait for the TM’s practical steps in this regard.”
The TSE boss added that if any of the companies were found ineligible, they can approach Iran Fara Bourse to join the over-the counter stock market .
“As the TM has not (yet) submitted the financial records of the designated companies, it is difficult to decide which company is eligible and which is not,” Sahraee said.
“Any company that wants to be listed must be diligent in corporate governance and its financial statements should be transparent”.
Corporate governance includes the processes through which corporations' objectives are set and pursued in the context of the social, regulatory and market environment.
These include monitoring the actions, policies, practices, and decisions of corporations, their agents, and affected stakeholders.