SEBON forms a panel to probe NB Bank share ownership transfer row

ShareSansar, February 24:

The Securities Board of Nepal (SEBON) has formed a panel to probe the ownership transfer row of Nepal Bangladesh Bank Limited.
 
The panel led by an official with the Legal Department of SEBON comprises of a member each from the Supervision and Regulation Departments of the regulatory body.

It is mandated to submit its report within a week.

Due to the complications surrounding the ownership transfer of 2.2 lakh units of ordinary shares of Nepal Bangladesh Bank, more than 1000 investors remain victimized for no fault of theirs.

SEBON has also been collecting all related documents and information regarding the case to launch the probe into the matter since last week.

Over the past few days, the investors and brokers have stopped trading any shares held by Pradhan and his family members as well as those held by one Shankar Kumar Shrestha, who apparently worked in collusion with Pradhan, as well scrips of Nepal Bangladesh Bank Limited and National Hydropower Company Limited (NHPC) to press the concerned parties to settle the problem in investors’ interest.

They have also been urging the concerned authorities, including the NEPSE and the bank management to at least immediately postpone the AGM, which is expected to endorse 17.89 percent dividend, including 10 percent bonus shares.

Notably, NEPSE has issued a written directive to the bank management to stall the upcoming AGM until the court gives final verdict in the case.

Though the book closure for the AGM has been announced, and adjusted base of Rs 552 announced, the sources privy of the development maintain that it would not practically affect the victimized investors.

The ownership transfer row of NBB and NHPC has resulted in the possible loss worth millions of rupees for more than 1 thousand investors who bought those shares unknowingly.

Though Nepal Investors’ Forum and Stock Brokers’ Association have been taking initiative to resolve the problem by bringing the stakeholders, including officials with SEBON and Nepal Stock Exchange Limited, the concerned bank and Pradhan together to find an amicable solution to the problem, there is no head way so far.

The ownership transfer row started after Pradhan and Shrestha obtained 220,000 units of ordinary shares from Laxmi Bahadur Shrestha, a promoter of NB Group and a former NBB director, for a loan.

While transferring the ownership of the shares, Laxmi Bahadur had made them sign another agreement, which barred them from selling those shares.  However, the duo went on to seek marginal lending by placing the same shares as collateral at Narayani National Finance.

Then they failed to repay the loan and the finance company sold the shares in the secondary market.

Laxmi Bahadur then filed a law suit against Pradhan and Shrestha at the Kathmandu District Court against the sale of the shares, and the court ruled in his favor asking the concerned authorities to stop transferring ownership of shares sold by the finance company.

Now Pradhan and company argue that they cannot be held responsible as they had only sought marginal lending from the finance company, and had not sold the shares to anyone else.

SEBON to probe Sanima Mai’s proxy row, too

Meanwhile, SEBON has also formed another team to probe into the proxy dispute in Sanima Mai Hydropower Company.

The team is led by one of SEBON’s Deputy Directors and comprises two officials.

Some shareholders from the site of the hydropower project being developed by the company had complaint that some people are trying to influence the proxy in their favor for the election of the public directors during the upcoming AGM.

When SEBON had enquired about the issue last week, the company management had replied that the signatures of the proxy and those in the share certificates issued by the company had matched.