Nepal Rastra Bank (NRB) has said it will relinquish its hold on the
management of Nepal Credit and Commerce (NCC) Bank only after initiating
a merger process to dilute the shareholding of two warring promoters.
The central bank, which took over the NCC management suspending its board in February 2014, extended the term until the end of this fiscal year.
The NRB’s intervention had come after the quarrel between two promoter groups—NB Group and a group led by investor Nirmal Pradhan, affected daily operation of bank.
NB Group has around 34 percent share in the bank, while the Pradhan-led group has close to 15 percent stake, including promoter’s and public shares.
Initially, the NRB had planned to hold an annual general meeting (AGM) and hand over the management to board be elected by the AGM.
However, after Nepal Stock Exchange (Nepse) barred the bank from holding the AGM over non-transfer of share ownership of about 106,000 shares sold by Binu Shrestha, a shareholder from the NB Group, for the last two months, the NRB decided to continue its management at the bank.
A senior NRB official said the central bank would initiate a merger between NCC and Nepal Bangladesh Bank (NBB).
NB Group has promoted both the banks, but the majority of its stake at NBB was sold to Bangladeshi investors, who are now majority shareholders. “The merger will reduce the ownership of both NB Group and Pradhan’s group at the unified bank,” said the NRB official.
According to NCC CEO Amrit Charan Shrestha, the central bank has directed to either end the cross holding of promoters in the banks or go for merger.
With the investors associated with NB Group on the run over banking frauds, the merger would be a viable option, said an NCC official.
However, there has been little progress towards the planned merger.
“Even a joint merger committee has not been formed yet,” said Rameshwor Sharma Aryal, chief operating officer of NBB.
Share ownership to be transferred
The NCC Bank board has decided to transfer the ownership of 106,000 shares sold by one of the bank’s promoter, Binu Shrestha, to the buyers. The purchasers, who bought the shares a year ago, have not been able to get the ownership transferred as the central bank has directed the bank to freeze shares owned by NB Group. Binu is wife of NB Group’s managing director Laxmi Bahadur Shrestha. The Nepal Rastra Bank had last year directed to freeze NB Group’s shares for its involvement in banking fraud. After the share transfer could not take place, the Nepal Stock Exchange barred the bank from holding annual general meeting. “Our board has decided to transfer the share ownership to the new buyers,” said NCC CEO Amrit Charan Shrestha. “Once the NRB approves our board’s decision, the AGM will be held.”
source: the kathmandu post,26 March 2015
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The central bank, which took over the NCC management suspending its board in February 2014, extended the term until the end of this fiscal year.
The NRB’s intervention had come after the quarrel between two promoter groups—NB Group and a group led by investor Nirmal Pradhan, affected daily operation of bank.
NB Group has around 34 percent share in the bank, while the Pradhan-led group has close to 15 percent stake, including promoter’s and public shares.
Initially, the NRB had planned to hold an annual general meeting (AGM) and hand over the management to board be elected by the AGM.
However, after Nepal Stock Exchange (Nepse) barred the bank from holding the AGM over non-transfer of share ownership of about 106,000 shares sold by Binu Shrestha, a shareholder from the NB Group, for the last two months, the NRB decided to continue its management at the bank.
A senior NRB official said the central bank would initiate a merger between NCC and Nepal Bangladesh Bank (NBB).
NB Group has promoted both the banks, but the majority of its stake at NBB was sold to Bangladeshi investors, who are now majority shareholders. “The merger will reduce the ownership of both NB Group and Pradhan’s group at the unified bank,” said the NRB official.
According to NCC CEO Amrit Charan Shrestha, the central bank has directed to either end the cross holding of promoters in the banks or go for merger.
With the investors associated with NB Group on the run over banking frauds, the merger would be a viable option, said an NCC official.
However, there has been little progress towards the planned merger.
“Even a joint merger committee has not been formed yet,” said Rameshwor Sharma Aryal, chief operating officer of NBB.
Share ownership to be transferred
The NCC Bank board has decided to transfer the ownership of 106,000 shares sold by one of the bank’s promoter, Binu Shrestha, to the buyers. The purchasers, who bought the shares a year ago, have not been able to get the ownership transferred as the central bank has directed the bank to freeze shares owned by NB Group. Binu is wife of NB Group’s managing director Laxmi Bahadur Shrestha. The Nepal Rastra Bank had last year directed to freeze NB Group’s shares for its involvement in banking fraud. After the share transfer could not take place, the Nepal Stock Exchange barred the bank from holding annual general meeting. “Our board has decided to transfer the share ownership to the new buyers,” said NCC CEO Amrit Charan Shrestha. “Once the NRB approves our board’s decision, the AGM will be held.”
source: the kathmandu post,26 March 2015
LINK
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