29 listed companies barred from stock trading
KATHMANDU, JUL 24 -
Shareholders of 29 listed companies are not being able to carry out transactions of their shares. These companies have been barred from stock trading for several reasons.
Of the 29 companies, four are in upgradation process, seven in merger process, some are yet renew their listing, while others are being interrogated by the central bank for financial irregularities.
“Share price is an indicator of any company’s performance,” said Rabindra Bhattarai, a stock analyst. “Investors’ right should not be seized by halting share transactions of any company in operation.” He stressed on the need for taking a decision on share transactions of companies heading for upgradation, at least. “Investors are suffering from carelessness of regulators,” he said.
Usually, the Nepal Stock Exchange (NEPSE) halts transactions of companies going for merger to prevent unnatural rise of such companies’ share price.
Share transactions of Birgunj Finance, Crystal Finance, Himchuli Development Bank, Kasthamandap Development Bank, Narayani Development Bank and Nepal Sri Lanka Merchant Bank (which does not exist following its merger with Nepal Bangladesh Bank) and Shikhar Finance are halted.
NEPSE has not allowed shares transactions of H&B Development Bank formed after the merger of Himchuli and Birgunj Finance even after the completion of the merger process.
Also, shareholders of Sanima Development Bank have not been able to carry out transactions ever since it started the the process of upgradation into commercial bank.
Share trading of Nepal Share Markets and Finance and Annapurna Finance and International Leasing and Finance Company that are seeking upgration, has also been halted.
Nepal Rastra Bank (NRB) has kept Nepal Share Markets (NSM) in the monitoring stage for its chairman Yogendra Shrestha’s involvement in financial irregularities. The upgrading of NSM is almost impossible as it was found to have used deposits for paid-up capital increment.
Likewise, share transactions of Madhyamanchal Gramin Bikas Bank (MGBB) and Gurkha Development were halted after the central bank took action against them over financial irregularities. Currently, MGBB is under the central bank’s control, while Gurkha has been declared crisis-ridden.
The central bank has termed the halting of share transactions as normal practice. “It is natural to halt transactions during the annual general meeting and when merger process starts,” said Bhaskarmani Gyawali, spokesperson for NRB. “Investors should not complain as the merger will benefit them,” he said.
NRB is also dilly-dallying in deciding the fate of FIs that have applied for upgradation. “We are studying the companies that are facing the central bank action,” said Gyawali.
Niraj Giri, director of the Securities Board of Nepal (Sebon) said except share transactions of companies heading for merger, other companies’ shares should be allowed to be traded through the Over the Counter trading (OCT) provision. OCT means trading outside the stock market.
Giri said Sebon’s legal department was studying on halting the share trading for upgradation and other reasons. Maximum companies beyond financial institutions, whose share trading has been halted, have not submitted renewal fees.
Despite the failure of the institutions to pay renewal charges for years, Nepal Stock Exchange (NEPSE) has not taken any action or removed them from its listing.
Source: Kantipur
Shareholders of 29 listed companies are not being able to carry out transactions of their shares. These companies have been barred from stock trading for several reasons.
Of the 29 companies, four are in upgradation process, seven in merger process, some are yet renew their listing, while others are being interrogated by the central bank for financial irregularities.
“Share price is an indicator of any company’s performance,” said Rabindra Bhattarai, a stock analyst. “Investors’ right should not be seized by halting share transactions of any company in operation.” He stressed on the need for taking a decision on share transactions of companies heading for upgradation, at least. “Investors are suffering from carelessness of regulators,” he said.
Usually, the Nepal Stock Exchange (NEPSE) halts transactions of companies going for merger to prevent unnatural rise of such companies’ share price.
Share transactions of Birgunj Finance, Crystal Finance, Himchuli Development Bank, Kasthamandap Development Bank, Narayani Development Bank and Nepal Sri Lanka Merchant Bank (which does not exist following its merger with Nepal Bangladesh Bank) and Shikhar Finance are halted.
NEPSE has not allowed shares transactions of H&B Development Bank formed after the merger of Himchuli and Birgunj Finance even after the completion of the merger process.
Also, shareholders of Sanima Development Bank have not been able to carry out transactions ever since it started the the process of upgradation into commercial bank.
Share trading of Nepal Share Markets and Finance and Annapurna Finance and International Leasing and Finance Company that are seeking upgration, has also been halted.
Nepal Rastra Bank (NRB) has kept Nepal Share Markets (NSM) in the monitoring stage for its chairman Yogendra Shrestha’s involvement in financial irregularities. The upgrading of NSM is almost impossible as it was found to have used deposits for paid-up capital increment.
Likewise, share transactions of Madhyamanchal Gramin Bikas Bank (MGBB) and Gurkha Development were halted after the central bank took action against them over financial irregularities. Currently, MGBB is under the central bank’s control, while Gurkha has been declared crisis-ridden.
The central bank has termed the halting of share transactions as normal practice. “It is natural to halt transactions during the annual general meeting and when merger process starts,” said Bhaskarmani Gyawali, spokesperson for NRB. “Investors should not complain as the merger will benefit them,” he said.
NRB is also dilly-dallying in deciding the fate of FIs that have applied for upgradation. “We are studying the companies that are facing the central bank action,” said Gyawali.
Niraj Giri, director of the Securities Board of Nepal (Sebon) said except share transactions of companies heading for merger, other companies’ shares should be allowed to be traded through the Over the Counter trading (OCT) provision. OCT means trading outside the stock market.
Giri said Sebon’s legal department was studying on halting the share trading for upgradation and other reasons. Maximum companies beyond financial institutions, whose share trading has been halted, have not submitted renewal fees.
Despite the failure of the institutions to pay renewal charges for years, Nepal Stock Exchange (NEPSE) has not taken any action or removed them from its listing.
Source: Kantipur
