NBB share transfer row nears resolution

KATHMANDU:

The capital market regulator has revoked the ban placed on trading of shares belonging to Nirmal Pradhan and party following their commitment to resolve the settlement of the ongoing Nepal Bangladesh Bank (NBB)’s share transfer row that has left more than 1,000 investors in the lurch.

Securities Board of Nepal (Sebon) has issued a circular to Nepal Stock Exchange (Nepse) to allow the transaction of NBB shares owned by Pradhan, his wife and two sons and his associate Shankar Shrestha.

“Pradhan’s group has pledged to settle with investors who were unable to get the NBB share certificates for the stocks sold by Pradhan within one month,” said Baburam Shrestha, chairman of Sebon, explaining the decision.

In March, Sebon had directed Nepse not to honour any transaction ordered by 10 individuals and three companies that are in the centre of the ongoing NBB share transfer row, for the time being.

“We have only opened the transfer of NBB shares to provide respite to the victims of the whole fiasco, according to regulations,” added Shrestha.

The investment of some 1,000 buyers of NBB’s 220,000 unit shares is in the lurch following the failure of transfer of the shares

that belonged to two large investors — Nirmal Pradhan and Shankar Shrestha.

The duo had pledged the shares at Narayani National Finance to obtain a loan. The finance company auctioned off the shares due to loan default. However, later Laxmi Bahadur Shrestha filed a case against them at Patan Appellate Court for violating the contract that was drawn with Pradhan that forbade him from selling the shares and demanded the share transfers be annulled. The court also stayed the share transfer in November 2013, which prevented share registrar Elite Capital from transferring shares in the name of investors who had bought the shares in May last year.

“The shares that were sold in the case could not be transferred to the buyers due to the court order, but Pradhan can transfer an equal quantity of NBB shares that is in his possession to buyers to settle the issue,” pointed out Sitaram Thapaliya, general manager of Nepse.

“So to make the transfer to the buyers, the regulator has revoked the ban placed on transactions by Pradhan and his associates,” he added.

Due to the transfer row, NBB had to postpone its annual general meeting, which was to be held on March 11.

A month back, the transaction ordered by Nirmal Pradhan, his wife and three sons; Laxmi Bahadur Shrestha, his brother and nephew; Shankar Kumar Shrestha and Nabin Shrestha along with that of three share trading companies — Rajdhani Investment, Bagmati Investment and Lhotse Investment — was banned on Sebon’s order.

The regulator had formed a probe panel in the last week of February to investigate the matter and had said a formal report would be submitted within a week. However, although more than a month has come to pass, Sebon has

remained mum on the progress so far.

In February, brokers had stopped taking orders for sale of shares belonging to the duo and that of NBB as the concerned authorities failed to address the issue.

Source: THT