NESDO Withdraws Dividend Case in Supreme Court; AGM Expected To Be Held within Shrawan

Nesdo Sambridha Laghubitta Bittiya Sanstha Limited (NESDO) has withdrawn the case it filed against the Nepal Rastra Bank (NRB) in the Supreme Court. The company had filed the case in the Supreme Court demanding the distribution of dividends as proposed. However, the company decided to withdraw the case after the court did not issue an interim order in its favor.

On Jestha 5, the company had filed a petition in the Supreme Court, naming Nepal Rastra Bank as the opposing party, seeking permission to distribute the proposed dividends. In response, on Jestha 9, a single bench presided by Justice Sushmalata Mathema issued a temporary interim order, instructing not to implement the NRB's instructions to reduce dividends. Furthermore, the court issued a show cause order to the NRB, summoning both parties to discuss the possibility of issuing an interim order. After discussions between the two parties, on Jestha 24, the bench consisting of Justices Ishwar Prasad Khatiwada and Kumar Regmi ruled against issuing an interim order. Consequently, on Ashad 7, the company withdrew the case as no interim order was granted in their favor.

Following the development, the company will hold a general meeting soon. After the decision of the board of directors, the notice of the general meeting is expected to be published within Shrawan.

Since the interim order has not been received, the company will distribute 17.93 percent dividend as per the Nepal Rastra Bank's instructions. 

Earlier, on Jestha 05, the company had filed a petition with the Supreme Court, naming NRB as the opposing party, and sought permission to distribute the proposed dividends. On Jestha 09, Justice Sushmalta Mathema, a single bench, issued a short-term interim order preventing the implementation of the central bank's instructions to reduce dividends. Furthermore, a show cause order was issued to the Rastra Bank, summoning both parties to discuss whether an interim order should be issued. Following the discussion between the parties, the court concluded that there was no need to issue an interim order.

The company resorted to legal action after the Rastra Bank blocked its proposal to distribute dividends totaling 73.6842 percent, instead directing it to pay only 17.9342 percent. During a Board of Directors meeting held on the 9th of Chaitra, Nesdo Microfinance proposed distributing 50% bonus shares, 20% cash dividend, and 3.6842 percent for tax purposes, amounting to a total dividend of 73.6842 percent. The company's current paid-up capital stands at 255 million.

Earlier, the NRB had instructed Nesdo Sambridha Laghubitta to distribute only 17.9342 percent in dividends. Dissatisfied with this directive, the company's Board of Directors filed a writ against the regulatory body for BFIs. However, since the court did not grant the requested interim order, the company is now obliged to distribute only 17.9342 percent in dividends.