NB Bank refutes rumors about 17% bonus share; sticks to initial pledge

ShareSansar, June 12:

Nepal Bangladesh Bank Limited has refuted rumors that it is planning to restructure the dividend it had pledged earlier for the last fiscal year.

Now that the bank has already received the second installment from ICFC Bank of Bangladesh to buy 8.40 lakh units of promoter shares, rumors are doing round in the market that NBB is planning to pledge 17 percent bonus shares instead of 10 percent bonus shares and 7 percent cash it had offered before its Annual General Meeting was deferred earlier this year.

“We don’t have any such plan to pledge 17 percent bonus shares,” NB Bank’s company secretary Dhiraj  Raj Subedi told ShareSansar today. “In fact, as we have been stating time and again, there will be no change in the dividend when we announce the fresh date of AGM shortly.”

With the share transfer row of NB Bank finally over last month, Nepal Stock Exchange Limited (NEPSE) has already given green signal to the bank to summon its AGM.

Subedi said that there are some technical issues to be settled, and the Board of Directors will meet within a few days to announce the fresh date for the AGM.

But he did not provide the details.

In the first week of May NB Bank had applied with NEPSE to hold its deferred Annual General Meeting at the earliest.

The share transfer row ended after NEPSE asked the concerned brokers to start transferring shares from Nirmal Pradhan and party as compensation to the shareholders who have been victimized in the process as he agreed to compensate the victims.

SEBON officials maintain that they suspended the ban placed on trading in shares held by Nirmal Pradhan and company on April 2 after they pledged to compensate the victimized share investors by within a month.

Back in the first week of March, SEBON has directed NEPSE to stop trading shares held by Nirmal Pradhan, his wife and three sons, and his relatives Laxmi Bahadur Shrestha, Shankar Kumar Shrestha and Nabin Shrestha along with the scrips registered in the names of three of his share trading companies — Rajdhani Investment, Bagmati Investment and Lhotse Investment.

The regulator issued the directive after investing the complications stemming from the share ownership transfer row of NBB and National Hydropower Limited (NHPC) owing to the dispute between the Nirmal Pradhan and NB Groups.

Due to the dispute between the two groups, NB Bank has been forced to put off its Annual General Meeting slated for March 11. Besides announcing the book closure on February 17 for the AGM, the bank had even announced adjusted base of Rs 552.

The AGM was expected to endorse 10 percent bonus shares and 7.79 percent cash dividend from the net profit the commercial bank earned in the last fiscal year 2069/70, besides electing some directors.

The share ownership transfer complication has led to possible loss worth millions of rupees for more than 1,000 investors who bought some shares of the bank unknowingly.

It all started after Pradhan and Shrestha obtained 220,000 units of ordinary shares from Laxmi Bahadur Shrestha, a promoter of NB Group and a former NB Bank director, for a loan.

While transferring the ownership of the shares, Laxmi Bahadur had made them sign another agreement, which barred them from selling those shares.  However, the duo went on to seek marginal lending by placing the same shares as collateral at Narayani National Finance.

Then they failed to repay the loan and the finance company sold the shares in the secondary market.

Laxmi Bahadur then filed a law suit against Pradhan and Shrestha at the Kathmandu District Court against the sale of the shares, and the court ruled in his favor asking the concerned authorities to stop transferring ownership of shares sold by the finance company.

To pressurize the concerned parties to settle the festering share transfer row, brokers had stopped trading shares held by Pradhan and company as well as that of NB Bank for some time in February.