Companies averse to paying Nepse listing renewal fee

KATHMANDU, Sep 24:

Less than half listed companies have paid annual listing renewal fees at Nepal Stock Exchange (Nepse) for this fiscal year. Though there are roughly three more weeks for the deadline to submit annual listing fee, most companies wait till the very end.

Almost one-fourth of the listed companies are suspended from trading for failing to pay the listing fee by mid-October every year. Suspension of the listed companies for failing to pay the listing renewal fees has become a ritual for Nepse, every fiscal year after the completion of the first quarter.

The listed stocks, debentures and bonds are supposed to pay the annual renewal fee within three months of the end of a fiscal year, but companies fail to make the payment within the deadline thus their trading is suspended as per regulation.

“So far about 90 listed companies have already paid the renewal fee, and this time to avoid suspending the companies in hoards, we have put a notice in our website asking them to pay the fee on time,” said senior officer at Nepse Niranjan Phuyal.

“Almost 20 companies have paid the renewal fee after the notice was published on the website, and we hope all the companies will pay before the deadline,” he added.

Last year, Nepse had to suspend the trading of 45 listed companies including Nepal Electricity Authority’s debentures. A year ago, trading of 28 listed companies including four development banks and four finance companies was suspended due to a delay in annual payment of listing renewal fee.

Every year around this time, Nepse has to suspend the trading of about 25 companies for this very reason. The renewal fee depends on the capital structure of the company –– the maximum a company has to pay is Rs 50,000 for those with a capital base greater than Rs 100 million.

The suspended companies scramble to pay the renewal fee the day the transaction is suspended. Even companies whose shares were traded within a week before the suspension ignore to pay the renewal fee on time creating difficulties for investors who have to wait for the companies to pay the renewal fee to buy or sell their stocks.

The suspension in trading due to sheer negligence of the companies is also an instance of bad corporate governance. Firms such as Hotel Yak and Yeti and a bunch of manufacturing companies have deliberately not paid the renewal fee with a hope of getting delisted.

Source:THT