NBB scrip ownership transfer row: Investors on verge of losing millions

ShareSansar, February 17:

With the book closure and the AGM of Nepal Bangladesh Bank Limited round the corner, the complications related to ownership transfer of the bank’s ordinary scrips stemming from Nirmal Pradhan’s move to cash in on those shares that did not belong to him has resulted in the possible loss worth millions of rupees for more than 1 thousand investors who bought those shares unknowingly.

Though Nepal Investors’ Forum and Stock Brokers’ Association have been taking initiative to resolve the problem by bringing the stakeholders, including officials with SEBON and Nepal Stock Exchange Limited, the concerned bank and Pradhan together to find an amicable solution to the problem, there is no head way so far.

Meanwhile, the investors and brokers have stopped trading any shares held by Pradhan and his family members as well as those held by one Shankar Kumar Shrestha, who apparently worked in collusion with Pradhan, as well scrips of NBB and National Hydropower Company Limited (NHPC) to press the concerned parties to settle the problem in investors’ interest.

They have also been urging the concerned authorities, including the NEPSE and the bank management to at least immediately postpone the book closure date, which falls tomorrow, and the AGM slated for March 11, which is expected to endorse 17.89 percent dividend, including 10 percent bonus shares.

“Talks shall continue today at a several places, including at the SEBON, to find an outlet to the problem,” said Narendra Raj Sijapati, chair of Stock Brokers’ Association. “Meanwhile, we have been urging the authorities, including NBB management, to at least defer the book closure and the AGM till we arrive at come conclusion.”

However, a highly placed source at NBB told Sharesansar at around the midday that though they were considering the request, they could not say for sure whether the book closure and the AGM could be deferred.

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.