NB Bank stalls AGM, cancels book closure; brokers to resume trading of scrips

ShareSansar, February 28:

Nepal Bangladesh Bank Limited has stalled its Annual General Meeting slated for March 11, citing the festering complications related to the transfer of ownership of some scrips of the bank.

Issuing a notice today, the commercial bank has stated that it has decided to put off its 19th AGM following the directive of Nepal Stock Exchange Limited to stall the program for the time being owing to the complication.

NB Bank has also cancelled the earlier announced book closure for the AGM till further notice. 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 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.

In a bid to settle the complications related to the ownership transfer of Nepal Bangladesh Bank Limited, stakeholders, including investors and brokers had been urging the SEBON and NEPSE officials to defer the AGM.

Meanwhile, t he brokers’ association, which had stopped trading shares of Pradhan and his family members as well as those held by one Shankar Kumar Shrestha, who apparently worked in collusion with Pradhan, as well all the scrips of NB Bank to press the concerned parties to settle the problem in investors’ interest, has decided to resume the trading of the bank’s scrips.

The brokers’ association official said that they decided to resume the trading as many more investors were affected by the decision to stall the trading of the bank’s scrip as 99 percent of the scrips are not affected by the ownership transfer row.

“We decided to resume the trading of NBB shares as the bank has decided to stall the AGM,” an official with the association informed, adding that they, however, will still not trade in the scrips of NHPC.

The regulator is also probing the ownership transfer row.

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

The ownership transfer row started after Pradhan and Shrestha obtained 220,000 units of ordinary shares from Laxmi Bahadur Shrestha, a promoter of NB Group and a former NBB 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.

Now Pradhan and company argue that they cannot be held responsible as they had only sought marginal lending from the finance company, and had not sold the shares to anyone else.