Nepal Share Market (NSM) ship on choppy seas
Sat, May 7, 2011 12:00 AM on Others,
KATHMANDU, MAY 07 -
Nepal Share Market and Finance (NSM) remained closed on Friday as the possibility of huge withdrawals emerged after news broke about misappropriation of public deposits worth Rs 1.5 billion by its executive chairman Yogendra Prasad Shrestha, who has resigned from his post.
Its offices were closed after the issuance of a notice at NSM’s head office and branches. A senior NSM official said the company would start withdrawing deposits after collecting sufficient amount to distribute to the depositors.
NSM, however, made it clear that deposits up to Rs 200,000 of individual depositors were secure as the amount up to that level has been insured by Deposit and Credit Guarantee Corporation. “We will make payment to depositors gradually,” it said.
The NSM said it has already frozen the assets of ex-executive chairman Shrestha. The board meeting of Friday chaired by new chairman Rajendra Man Joshi also decided to freeze the securities in the name of Shrestha and his family in different companies. The central bank has already frozen all his property.
According to an NSM source, Shrestha gave the nod to freeze his assets although he claimed that he had no intention of ruining the finance company. Admitting his ‘mistakes,’ he told Nepal Rastra Bank officials that he would not resist if the misappropriated amount was recovered from his assets.
A senior NRB official said that Shrestha failed to produce the documents of loans worth Rs 1.5 billion. “There is nothing in the 70-80 files that the company sent us to prove that the loans went to the real loanees,” said the central bank official. In the initial NRB investigation, it was found that Shrestha took loans from his own company in the name of fake loanees. Some of the loanees that Shrestha produced as real loanees are the ones who have already paid back the loans, according to NRB officials.
He used to create dummy loanees and transfer the money into the accounts of his son and wife and the amount was used to purchase rights shares for him and his kin.
He could engage in such malpractices as other board members had given him a free hand in decision making on loans. “He was free to make decisions on maximum level of loans that a financial institution can give to single party,” said the NRB official involved in the probe. “Other board members failed to fulfil their legal duty as board members.”
Shrestha also misappropriated Rs 200 million of Rastriya Beema Sansthan, which would lead to bigger punishment for him for misappropriating government resources. “The deposit of RBS has not been included in the corporate deposit details that company has to send to the central bank,” said the NRB official.
Source: Kantipur
Nepal Share Market and Finance (NSM) remained closed on Friday as the possibility of huge withdrawals emerged after news broke about misappropriation of public deposits worth Rs 1.5 billion by its executive chairman Yogendra Prasad Shrestha, who has resigned from his post.
Its offices were closed after the issuance of a notice at NSM’s head office and branches. A senior NSM official said the company would start withdrawing deposits after collecting sufficient amount to distribute to the depositors.
NSM, however, made it clear that deposits up to Rs 200,000 of individual depositors were secure as the amount up to that level has been insured by Deposit and Credit Guarantee Corporation. “We will make payment to depositors gradually,” it said.
The NSM said it has already frozen the assets of ex-executive chairman Shrestha. The board meeting of Friday chaired by new chairman Rajendra Man Joshi also decided to freeze the securities in the name of Shrestha and his family in different companies. The central bank has already frozen all his property.
According to an NSM source, Shrestha gave the nod to freeze his assets although he claimed that he had no intention of ruining the finance company. Admitting his ‘mistakes,’ he told Nepal Rastra Bank officials that he would not resist if the misappropriated amount was recovered from his assets.
A senior NRB official said that Shrestha failed to produce the documents of loans worth Rs 1.5 billion. “There is nothing in the 70-80 files that the company sent us to prove that the loans went to the real loanees,” said the central bank official. In the initial NRB investigation, it was found that Shrestha took loans from his own company in the name of fake loanees. Some of the loanees that Shrestha produced as real loanees are the ones who have already paid back the loans, according to NRB officials.
He used to create dummy loanees and transfer the money into the accounts of his son and wife and the amount was used to purchase rights shares for him and his kin.
He could engage in such malpractices as other board members had given him a free hand in decision making on loans. “He was free to make decisions on maximum level of loans that a financial institution can give to single party,” said the NRB official involved in the probe. “Other board members failed to fulfil their legal duty as board members.”
Shrestha also misappropriated Rs 200 million of Rastriya Beema Sansthan, which would lead to bigger punishment for him for misappropriating government resources. “The deposit of RBS has not been included in the corporate deposit details that company has to send to the central bank,” said the NRB official.
Source: Kantipur
