Nepse suspends 30 firms for not paying renewal fee

KATHMANDU, OCT 18: 

This year too, 30 listed companies have failed to pay their annuallisting renewal fee at Nepal Stock Exchange (Nepse) for this fiscal year. 

The companies suspended today include nine finance companies, five development banks, one insurance company, one hydropower company, two trading companies, one hotel, one film development corporation, and nine manufacturing companies. Nepal Electricity Authority’s debenture has also been suspended from trading for failing to pay the renewal fee. 

Among the suspended companies, shares of Multipurpose Finance, Himalayan Finance, Pashchimanchal Finance, Biratlaxmi Development Bank, and National Hydropower Company were traded last week. 

Listed companies are supposed to pay the annual renewal fee within three months of the end of the fiscal year, but the companies failed to pay within the deadline, thus their trading was suspended as per regulation.

This year, Nepse had even issued a notice for listed companies to pay the annual listing fee on time. Companies tend to overlook the matter out of utter carelessness which inconveniences investors. “We were hopeful that all the companies would pay before the deadline,” said senior officer at Nepse Niranjan Phuyal. 

Among the suspended companies, three companies –– Nepal Development Bank, Jyoti Spinning Mills and Samjhana Finance –– are going through liquidation. 

Share trading of Capital Merchant Banking and Finance, General Finance, Gurkha Development Bank, Crystal Finance and NB Insurance was suspended due to action taken against them by the concerned regulators. 

Likewise, nine manufacturing companies, two trading companies, and Hotel Yak and Yeti have not been paying the annual listing fee for the last few years in the hope of getting de-listed. 

Last year, Nepse had to suspend the trading of 45 listed companies including Nepal Electricity Authority’s debentures.

A year back, trading of 28 listed companies, including four development banks and four finance companies, was suspended due to a delay in paying the listing renewal fee.

Every year around this time, Nepal Stock Exchange has to suspend the trading of about 25 companies for this very reason. 

The renewal fee depends on the capital structure of the company –– the maximum that companies have to pay is Rs 50,000 for those with a capital base greater than Rs 100 million. 

The suspended companies scramble to pay the renewal fee the day the transaction is suspended. The suspension of trading arising from sheer negligence of the companies is also an instance of bad corporate governance.

Source: THT