Supreme Court Denies Interim Order in Nesdo Sambridha Laghubitta's Dividend Dispute

Since the court did not grant the requested interim order, the company is now obliged to distribute only 17.9342 percent in dividends.

The Supreme Court of Nepal has declined to issue an interim order in the dividend dispute involving Nesdo Sambridha Laghubitta Bittiya Sanstha Limited (NESDO). NESDO had filed a case against the Nepal Rastra Bank (NRB), urging the court to permit the distribution of the proposed dividends in its entirety.

However, today, the court rejected the microfinance company's request for an interim order in the case. The joint bench of Justices Ishwar Prasad Khatiwada and Kumar Regmi issued an order stating that no interim order would be granted in this matter.

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.

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.