CDS and Clearing Limited Warns Against Fraudulent Applications in Public Securities Issues

CDS and Clearing Limited issued a warning on Monday regarding fraudulent applicants during the Initial Public Offering (IPO) process of companies.

In today's press release, CDS and Clearing Limited emphasized that engaging in activities such as maintaining insufficient funds in bank accounts or applying for more unit shares than the available balance during IPO applications, with the intent to manipulate the number and quantity of shares for public issuance, is considered false and fraudulent under the Securities Act 2063.

The central depository body firmly stated that individuals and institutional organizations involved in such activities will be subject to existing laws. Therefore, it is urged to refrain from participating in such deceptive practices.

The notice of CDS and Clearing Limited comes at a time when Ghorahi Cement Industry Limited has extended the deadline to issue its 69,11,670 unit IPO shares of Rs 435 per unit (including a premium of Rs 335) to the general public till 14th Ashad.

The issue opened on 32nd Jestha and was supposed to close today i.e. on 4th Ashad, 2080. Although, a reasonable number of applications have been received, as the applications are in the process to be verified, the time period to apply for the issue has been extended till 14th Ashad, 2080. The circumstance hints of potential fraudulent activities that might be ongoing in the application procedure of the public issue of Ghorahi Cement Industry Limited.  

See CDS's latest data on Ghorahi's issue: 

Talking to Sharesansar over the phone, one of the officials at Securities Board of Nepal (SEBON) stated that the application details of Ghorahi Cement's ongoing IPO issue has been requested by the board. The Board will review the report and further details will be made available promptly following the review, added the source.

CDS and Clearing Limited serves as a central depository for various instruments, particularly facilitating the handling of securities in dematerialized form, including equity, bonds, warrants, and other similar financial instruments.