NEPSE mulls stern action against defiant NHPC factions

ShareSansar, March 23:

In an apparent attempt to defy the three-day ultimatum issued by Nepal Stock Exchange Limited (NEPSE) to unify its Boards of Directors (BoDs) to appoint the RTS, each the factions of National Hydropower Company Limited have only responded by writing letters claiming it is the rightful promoters of the company.

“Instead of coming up together to defuse the crisis, both the factions have resorted to their old tactics of claiming to be the genuine company,” NEPSE General Manager Sitaram Thapaliya told ShareSansar today. “We are seriously investigating their response to plan our next move.”

He further said that NEPSE was thinking along taking stern action against both the factions.

On the basis of a decree issued by the Patan Appellate Court not to impede the trading of shares of National Hydropower Company Limited, NEPSE had issued a three-day ultimatum to the crisis-ridden hydropower developer on March 19.

The company whose shares traded at as high as Rs 600 when stock market was surging to an unprecedented level around eight years back went on a free fall when company ran into rough weather due to extremely poor and non-transparent corporate governance.

To further complicate the problem, two groups of promoters – each led by notorious NB Group and Nirmal Pradhan — have been staking claim over the company over the recent years.

And, due to the row between the two groups, NHPC has not been able to renew the agreement with its RTS, Grow More Merchant Bank since Mangshir.
NEPSE’s latest directive aims at addressing the problem.

NEPSE has asked both the factions of NHPC to harmonize their BoDs as well as the management teams and the offices and to duly notify it about within three days.

The circular to this effect issued by NEPSE last week to NHPC has also asked the company to appoint Grow More Merchant Banker as its RTS, citing the court’s decree.

On the other hand, both the groups are still trying to fool the share investors by asking them to transfer the ownership of the shares traded in the past claiming that they have renewed the agreement with the RTS.

But Grow More officials maintain that they have not renewed the RTS agreement with the NHPC.

“The agreement has not been renewed ever since it expired in Mangshir irrespective of the rumors in the market,” Grow More officials said. “We cannot strike a deal with the company until the rival groups come together with a common company.”

The group led by Prakash Rajaure, which is believed to be close to Nirmal Pradhan and the other group led by Yogendra Rai, which is said to be close to the NB Group, had issued separate notices earlier this month, asking the investors to transfer the
ownership of NHPC scrips traded up to February 17 by March 21.

It may be noted here that the scrip had breached the par after a hiatus of four years in February as the investors hoped that the crisis might be over soon following the rumor of the renewal about the renewal of the contract with the RTS.

However, stakeholders, including the brokers, who have been closely following the developments, take this step by the rival groups as a ploy to further complicate the problem.

Though the regulator has not been able to take a bold stance on the festering issue and NEPSE has even withdrawn the trading suspension of NHPC shares since June following the Patan Appellate Court’s decree, the brokers have not been trading the shares.

“It’s not that we are opposed to trading NHPC shares, but who will guarantee that the ownership of the traded scrips will be transferred in absence of the RTS?” President of Brokers’ Association Narendra Sijapati told ShareSansar. “We are ready to trade the shares if the investors are ready to sign an auxiliary agreement with us that they are ready to face the eventualities in absence of the RTS.”

“See the problem is that the promoters really don’t care for hundreds of retail investors who have already suffered much due to their ill motives. They are still trying to dupe the investors,” said a broker, insisting anonymity.

Meanwhile, both the groups refute such allegation, claiming that they have been moving the court to resolve the dispute at the earliest in the utmost interest of the investors.