NBB’s AGM likely to be deferred; SEBON launches probe into ownership transfer row

ShareSansar, February 18:

In a bid to settle the complications related to the ownership transfer of Nepal Bangladesh Bank Limited, key stakeholders, including SEBON, NEPSE officials, brokers and investors are likely to agree to defer the Annual General Meeting of the bank slated for March 11.

Though the book closure for the AGM has been announced, and adjusted base of Rs 552 announced, today, the sources privy of the development maintain that it would not practically affect the victimized investors.

“Since we have stopped trading the scrip in the first place, and that the AGM would have to be deferred, this book closure won’t affect the investors,” said Narendra Raj Sijapati, chair of Stock Brokers’ Association.

Meanwhile, the Securities Board of Nepal (SEBON), the regulator, has started gathering all documents related to the matter to probe the case so that it can be resolved.

“We had a meeting with the Brokers’ Association today,” SEBON Spokesman Nirja Giri told ShareSansar. “We will now collect all information and documents regarding this case so that we can address the case.”

Sijapati also said that they were now much hopeful about the case since the regulator has stepped in to settle the problem.

Nirmal Pradhan and company’s move to cash in on 2.2 lakh unit shares of NBB that did not belong to them 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 AGM, which is expected to endorse 17.89 percent dividend, including 10 percent bonus shares.

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.