SEBON dismisses accusation of prioritizing right share issues over public issues; says IPO approval delayed for not fulfilling requirements

Securities Board of Nepal (SEBON) has denied the allegation that it has been prioritizing approval for right issues over initial public issues (IPO/FPO). Issuing a press statement, the Board said that the companies themselves have not fulfilled complete requirements for approval. Two companies in particular, Akhukhola Jalbidhut Company Limited and Garjang Upatyaka Hydropower Limited, have been waiting for approval since as far as Jestha 2073. Dismissing the news, SEBON has clarified that the issues have been delayed as the companies have not been able to complete the requirements as per Securities Issue Guidelines. Since Akhukhola Jalbidhut Company received the lowest credit rating i.e. [ICRANP] IPO Grade 5 for the IPO, the company has to underwrite all of its shares before issuing for public. Likewise, Garjang Upatyaka Hydropower has not been rated yet, which is why approval process for the IPO has been delayed. The Board further adds that it will expedite the IPO process as soon as the companies provide adequate documents and fulfill the requirements as per Securities Issue and Allotment Guidelines 2074. Lately, SEBON has expedited right share issues of Banks and Financial Institutions (BFIs) to ease the process of increasing their capital as per NRB’s capital requirement under which the Board has renounced the requirement of credit rating for BFIs that meet up certain conditions. Overall, the Board has okayed right issues worth Rs 42.30 arba of 71 companies and IPO/FPO worth Rs 9.24 crore of 19 companies so far in this fiscal year. By expediting the process of providing approval for right shares, the Board has clarified that this has not affected any IPO approval process. The IPO approval process has been delayed due to the respective companies not fulfilling the requirements. The Board will issue approval whenever the companies provide the documents and fulfill the requirements as per the guidelines. The news published by a national daily accusing SEBON of delaying IPO/FPO approval is completely untrue, added the statement.