Capital Merchant on fake lending spree
Sun, Jun 26, 2011 12:00 AM on Others,
KATHMANDU,June 26:
It seems Capital Merchant Bank and Finance Company – that pulled its shutter down yesterday citing acute cash shortage – has faked accounts and lent some Rs 480 million, according to preliminary investigation.
The probe team found that the finance company has lent Rs 300 million to a non-existent sugar mill and Rs 180 million to yet another non-existent furniture factory, though the probe team suspects the amount could be much bigger.
The central bank delayed its special refinancing request since last one week due to suspicious transaction, according to the sources.
The class C financial institute that closed its operations and went to ask for rescue package yesterday had to return empty handed due to its bad governance. The central bank has asked the management to immediately start operations as it was illegal to close down daily operations and management has responded positively.
Earlier, Samjhana Finance, United Development Bank, Gorkha Development Bank, Nepal Share Market and Financial Institute and People’s Finance had faced trouble due to lack of good corporate governance. The central bank has been monitoring the finance company since last week.
Since it was facing acute shortage of cash from last one week, the finance company has also applied to the central bank for special refinancing facility but the central bank team was studying its books that were found suspicious.
The bank’s management and central bank along with Nepal Finance Companies’ Association had yesterday held discussions on the possible rescue of the class C financial institution — that has 12 branches including its head office at Battisputali in Kathmandu — has posted Rs 40.84 million profits in the third quarter from Rs 52.43 million in the second quarter, according to its published unaudited report.
The finance company has a Rs 935 million paid up capital and has also been listed in the secondary market. Its shares were traded at Rs 132 per unit at the secondary market last time.
Its financial statement revealed that it has a deposit of Rs 3.04 billion and loan and advances stand at Rs 3.36 billion, though the financial statement of the third quarter shows that its CD ratio stands at 82.84 per cent.
Nepali Army’s deposit safe
Nepal Army has said that its deposit in Capital Merchant Bank and Finance Company is safe. Though the exact deposit amount is yet to calculate, the Army has withdrawn some last week. Of the total Rs 17.50 billion deposit in various banks and financial institutions, the Army has deposited 93 per cent in commercial banks and only seven per cent is deposited in development banks and finance companies. It has planned to invest some Rs 2 billion on its Medical College and has notified banks and financial institutions some four months ago to arrange fund according to their convenience.
Source: THT
It seems Capital Merchant Bank and Finance Company – that pulled its shutter down yesterday citing acute cash shortage – has faked accounts and lent some Rs 480 million, according to preliminary investigation.
The probe team found that the finance company has lent Rs 300 million to a non-existent sugar mill and Rs 180 million to yet another non-existent furniture factory, though the probe team suspects the amount could be much bigger.
The central bank delayed its special refinancing request since last one week due to suspicious transaction, according to the sources.
The class C financial institute that closed its operations and went to ask for rescue package yesterday had to return empty handed due to its bad governance. The central bank has asked the management to immediately start operations as it was illegal to close down daily operations and management has responded positively.
Earlier, Samjhana Finance, United Development Bank, Gorkha Development Bank, Nepal Share Market and Financial Institute and People’s Finance had faced trouble due to lack of good corporate governance. The central bank has been monitoring the finance company since last week.
Since it was facing acute shortage of cash from last one week, the finance company has also applied to the central bank for special refinancing facility but the central bank team was studying its books that were found suspicious.
The bank’s management and central bank along with Nepal Finance Companies’ Association had yesterday held discussions on the possible rescue of the class C financial institution — that has 12 branches including its head office at Battisputali in Kathmandu — has posted Rs 40.84 million profits in the third quarter from Rs 52.43 million in the second quarter, according to its published unaudited report.
The finance company has a Rs 935 million paid up capital and has also been listed in the secondary market. Its shares were traded at Rs 132 per unit at the secondary market last time.
Its financial statement revealed that it has a deposit of Rs 3.04 billion and loan and advances stand at Rs 3.36 billion, though the financial statement of the third quarter shows that its CD ratio stands at 82.84 per cent.
Nepali Army’s deposit safe
Nepal Army has said that its deposit in Capital Merchant Bank and Finance Company is safe. Though the exact deposit amount is yet to calculate, the Army has withdrawn some last week. Of the total Rs 17.50 billion deposit in various banks and financial institutions, the Army has deposited 93 per cent in commercial banks and only seven per cent is deposited in development banks and finance companies. It has planned to invest some Rs 2 billion on its Medical College and has notified banks and financial institutions some four months ago to arrange fund according to their convenience.
Source: THT
