Sarbottam Cement Calls AGM, What Happened to its IPO Via Book Building?

Sarbottam Cement Limited has called its 3rd AGM on 11th Magh, 2078. The meeting will be held in the company's office in Tinkune, Kathmandu, starting at 10 am that day.

These are the general agendas:

1) Endorsement of financial reports for the fiscal year 2077/78.
2) Endorsement of annual reports presented by the chairman.
3) Approval of auditor's compensation.
4) Misc.

These are the special agendas:

1) Issuance of IPO via book building.
2) Endorsement of purchase of limestone deposit located in Rorang, Dhading, for Rs. 15.01 crores.

Announcement

The IPO procedure of Sarbottam Cement has been controversial for reasons that have been heavily covered by media portals by now.

When we last contacted the issue manager Global IME Capital on June 09 last year, the issue manager had said that the IPO of the company was halted for the fiscal year. According to the clause of SEBON, the capital market regulator, companies should at least have one operational fiscal year after being converted to a public limited company. This is why the IPO process couldn't continue for the fiscal year.

However, the company then entered a bigger scandal in the capital market. Bhishma Raj Dhungana, former Chairman of the Securities Board of Nepal was sacked on count of illegal share ownership of Sarbottam Cement. Dhungana was stated guilty by the MoF of illegally buying shares of Sarbottam Cement through the OTC market, publishing a list of 51 companies under the influence of various power centers, acting unethically in the stock market, and taking financial benefits from various parties in the market.

Similarly, Chandra Singh Saud, former Chief Executive Officer of the Nepal Stock Exchange (NEPSE), had also resigned on moral grounds after allegedly being involved in the same case.

This is why the IPO of Sarbottam Cement has been controversial. When Sharesansar contacted the issue manager today, the company representative stated that there has been no progress on the IPO procedure of the cement manufacturer. The issuer company hasn't signed the agreement with NEPSE that would allow it to take the procedure ahead. The representative sounded as if the company's IPO issue had been in the dark, and had little hopes of materializing any time soon.

Stock market veterans also claim that this event has unfortunately questioned the viability and credibility of the Book Building process in lack of proper regulation.