Capital market regulator has started a formal investigation into the Nepal Bangladesh Bank (NBB) share ownership transfer scandal from today.
The failure of share transfer of some quarter million stocks of NBB belonging to two large investors — Nirmal Pradhan and Shankar Shrestha — has left investment of around 1,000 buyers worth Rs 130 million in lurch. The brokers have stopped taking orders from two investors and of the NBB shares to create pressure on the market regulator to take action against those involved in unlawful share transactions.
“The probe panel has started to investigate the matter from today and the required action will be taken against those involved based on the report presented by the team,” informed spokesperson for the capital market regulator — Securities Board of Nepal (Sebon) — Niraj Giri.
“The investigation team has been directed to conclude the investigation within next seven days,” he added.
The investors who had purchased the shares owned by the two investors have been waiting to be issued share certificates for almost a year. However, the sellers are said to have sold shares that were not actually owned by them. One of the promoters of NBB, Laxmi Bahadur Shrestha had obtained loan from Pradhan, but with a contract that forbade Pradhan from selling those shares.
Later, Pradhan and Shankar Shrestha pledged the shares at Narayani National Finance to obtain loan. The finance company then auctioned off the shares when the borrowers could not repay the loans.
Laxmi Bahadur Shrestha then lodged a case at Kathmandu District Court to annul the share transfers. The court also stayed the share transfer in November 2013, which prevented share registrar Elite Capital to transfer shares in the name of the investors who had bought the shares in May last year.
“Sebon cannot take any action based on hearsays, so we have to look into each and every aspect of the case, such as, who were actually involved in trading and how they played in the market, before deciding how to compensate the victims,” pointed out Giri.
The three-member probe team is headed by the regulator’s legal officer and includes officials at its surveillance and regulation department.
Due to ongoing share transfer row, the stock exchange also directed NBB to cancel its annual general meeting (AGM) scheduled for March 11. The bank had announced 7.9 per cent cash and 10 per cent stock dividend to be approved by the AGM.
The problems with the bank’s share ownership transfer surfaced as the book closure date approached. The shares that were on blank transfer state needed to be cleared to obtain declared dividend. However, the share registrar of the bank, Elite Capital could not issue new certificates to the shares due to stay order of the court on the ongoing case between Laxmi Bahadur Shrestha and Nirmal Pradhan.
source: the kathmandu post,24 feb 2014
LINK
The failure of share transfer of some quarter million stocks of NBB belonging to two large investors — Nirmal Pradhan and Shankar Shrestha — has left investment of around 1,000 buyers worth Rs 130 million in lurch. The brokers have stopped taking orders from two investors and of the NBB shares to create pressure on the market regulator to take action against those involved in unlawful share transactions.
“The probe panel has started to investigate the matter from today and the required action will be taken against those involved based on the report presented by the team,” informed spokesperson for the capital market regulator — Securities Board of Nepal (Sebon) — Niraj Giri.
“The investigation team has been directed to conclude the investigation within next seven days,” he added.
The investors who had purchased the shares owned by the two investors have been waiting to be issued share certificates for almost a year. However, the sellers are said to have sold shares that were not actually owned by them. One of the promoters of NBB, Laxmi Bahadur Shrestha had obtained loan from Pradhan, but with a contract that forbade Pradhan from selling those shares.
Later, Pradhan and Shankar Shrestha pledged the shares at Narayani National Finance to obtain loan. The finance company then auctioned off the shares when the borrowers could not repay the loans.
Laxmi Bahadur Shrestha then lodged a case at Kathmandu District Court to annul the share transfers. The court also stayed the share transfer in November 2013, which prevented share registrar Elite Capital to transfer shares in the name of the investors who had bought the shares in May last year.
“Sebon cannot take any action based on hearsays, so we have to look into each and every aspect of the case, such as, who were actually involved in trading and how they played in the market, before deciding how to compensate the victims,” pointed out Giri.
The three-member probe team is headed by the regulator’s legal officer and includes officials at its surveillance and regulation department.
Due to ongoing share transfer row, the stock exchange also directed NBB to cancel its annual general meeting (AGM) scheduled for March 11. The bank had announced 7.9 per cent cash and 10 per cent stock dividend to be approved by the AGM.
The problems with the bank’s share ownership transfer surfaced as the book closure date approached. The shares that were on blank transfer state needed to be cleared to obtain declared dividend. However, the share registrar of the bank, Elite Capital could not issue new certificates to the shares due to stay order of the court on the ongoing case between Laxmi Bahadur Shrestha and Nirmal Pradhan.
source: the kathmandu post,24 feb 2014
LINK
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