Listed companies fail to hold annual meetings on time
KATHMANDU, July 8:
Despite current fiscal year drawing to closure, some 41 listed companies are yet to hold their Annual General Meeting, whcih is mandatory according to the regulatory authority of the capital market.
“Only 85 listed companies conducted their annual meeting within the six months of the closing of last fiscal year,” according to Securities Board of Nepal (Sebon). “Other 57 listed companies held the annual meeting later than sixth month.” “It is also an example of bad corporate governance,” the board said, adding that maintaining the easy flow of information for the shareholders is one of the important responsibilities of the public limited companies.
For the minority shareholders annual meetings are the only portal where they can directly probe the company’s board members and management regarding the company’s performance. Moreover, annual meeting provides the opportunity for the shareholders and directors to review the financials of the company and interact directly with the shareholders regarding the future course of the business.
The companies owe their shareholders conducting the annual meeting on time but they prefer to dodge the shareholders.
The late annual meeting means the shareholders do not get the adequate information regarding the companies — they have invested in — on time. “The stale information and statistics are of no use to the investors in investment related decision making,” said acting executive director of Sebon Niraj Giri.
To increase compliance from the listed companies, the capital market regulator is introducing the provision of penalising the defiant public limited companies in the amendment of Securities Act. The penalty will not be much harsh yet keep them in tight regulatory rein.
Even Nepse Stock Exchange held its annual meeting only in May that is nine months after the fiscal year ended. The stock exchange is considered to be the frontline regulator but in this case the regulator itself flouted the rule.
“The current provision allows monetary penalty but the conditions attached to it are very harsh thus Sebon refrains from fining the companies,” he said. If the regulator slaps monetary fine to the companies then the according to the law all of the promoters will be disqualified to hold the position of director or be appointed on managerial posts in any of the public limited company for next ten years which according to the regulator is an extreme punishment.
“In the amendment of the Securities Act, the board is seeking to revise the provisions for penalty that will be strict but not unnecessarily harsh,” he added. The regulator is hopeful that they can discipline the listed companies and other securities businessperson to submit the financials on time.
Source: THT
Despite current fiscal year drawing to closure, some 41 listed companies are yet to hold their Annual General Meeting, whcih is mandatory according to the regulatory authority of the capital market.
“Only 85 listed companies conducted their annual meeting within the six months of the closing of last fiscal year,” according to Securities Board of Nepal (Sebon). “Other 57 listed companies held the annual meeting later than sixth month.” “It is also an example of bad corporate governance,” the board said, adding that maintaining the easy flow of information for the shareholders is one of the important responsibilities of the public limited companies.
For the minority shareholders annual meetings are the only portal where they can directly probe the company’s board members and management regarding the company’s performance. Moreover, annual meeting provides the opportunity for the shareholders and directors to review the financials of the company and interact directly with the shareholders regarding the future course of the business.
The companies owe their shareholders conducting the annual meeting on time but they prefer to dodge the shareholders.
The late annual meeting means the shareholders do not get the adequate information regarding the companies — they have invested in — on time. “The stale information and statistics are of no use to the investors in investment related decision making,” said acting executive director of Sebon Niraj Giri.
To increase compliance from the listed companies, the capital market regulator is introducing the provision of penalising the defiant public limited companies in the amendment of Securities Act. The penalty will not be much harsh yet keep them in tight regulatory rein.
Even Nepse Stock Exchange held its annual meeting only in May that is nine months after the fiscal year ended. The stock exchange is considered to be the frontline regulator but in this case the regulator itself flouted the rule.
“The current provision allows monetary penalty but the conditions attached to it are very harsh thus Sebon refrains from fining the companies,” he said. If the regulator slaps monetary fine to the companies then the according to the law all of the promoters will be disqualified to hold the position of director or be appointed on managerial posts in any of the public limited company for next ten years which according to the regulator is an extreme punishment.
“In the amendment of the Securities Act, the board is seeking to revise the provisions for penalty that will be strict but not unnecessarily harsh,” he added. The regulator is hopeful that they can discipline the listed companies and other securities businessperson to submit the financials on time.
Source: THT
