32 May, Kathmandu. After the completion of the term of Ramesh Kumar Hamal on 20 December 2080, the Nepal Securities Board (SEBON) is leaderless.
A new chairman had to be chosen without the previous chairman retiring. The government did not do that, it stopped the process of appointing the chairman for five and a half months and played a ‘dirty joke’ on 6.3 million share investors.
Apart from the regular work done by the staff on the board, all the activities that should be done by the leadership have been stopped for 5 and a half months. However, the government is silent.
In the absence of a chairman on the board, not only the companies that are developing projects with specific plans and objectives and planning to move forward by mobilizing capital through the stock market are not only affected, but the government is also doing injustice to millions of investors who have invested in the market with a capitalization of 34 trillion that is traded in the secondary market. is
According to the provisions of the Securities Act, the government appointed National Planning Commission Vice President Dr. Under the leadership of Min Bahadur Shrestha, a recommendation committee was formed with Uday Niraula as the chairman of the finance secretary and expert member.
Although the government decided to form the committee on January 4, due to the delay in the committee’s meeting and the politics of changing the government, it took about one and a half months for the committee to formulate the procedure and ask for the application.
On February 16, the Chairman Recommendation Committee published a notice and asked for applications for the chairmanship, and 19 people applied until February 30, the last day of application.
The recommendation committee, which has been delaying every process, shortlisted the names of five of the 19 applicants and published it on March 25.
The process of appointing the board chairman, which was stopped after the shortlist was published, has not been able to move forward even though there is more. The recommendation committee recommends the names of three out of five, out of which the government appoints one as the chairman of the board in the Act.
Instead of improving and developing the securities market by appointing a chairman, the government is focused on interfering in the board and running it like a branch of the Ministry of Finance, the board’s employees alleged.
The employee union made the allegation publicly at the board’s anniversary function. Meanwhile, Finance Minister Varshman Pun instead of taking the initiative to appoint the board chairman, has changed the director representing the board from the Ministry of Finance and sent his confidant as a director.
There is a legal provision that when the chairman is vacant on the board, the director representing the Ministry of Finance plays an executive role.
Recently, when the Act on Prevention of Money Laundering was amended, the Securities Act was also amended and there is a provision that in case of vacancy of the chairman, only the director representing the Ministry of Finance can act as the executive chairman.
Narendra Kumar Rana has now joined the board as the representative of the Ministry of Finance.
After the government did not appoint a chairman for five months and sent an employee of the Ministry of Finance to play the role of executive chairman of a sensitive market like the securities market, it has been widely criticized.
“Now, there is no other work than going to the office to attend the departmental work,” said an employee of the board. Companies applying for public issue at the Securities Board are in a hurry. Since there is no chairman, the process of mobilizing capital without public issue has been stalled since January.
Another employee of the board said that the government did not appoint a chairman because it saw the interest of the middleman rather than market development and tried to run the branch of the Ministry of Finance.
‘At present, the government’s aim is to develop the market and protect the interests of investors. The government is focusing on which middleman’s contract to whom to sell stock exchange license and to find a person who can work for that,’ says the board’s employee.
The employee complained that in recent times, the decisions of the securities board are based on commercial interest rather than market development and investor’s interest, and when the leadership is brought accordingly, the branch of the board is becoming weaker.
Sources claim that the main reason for not being appointed as the president is that the CPN-Maoist Center, which is still in power, and the UML, the largest party in the power coalition, cannot agree on who should be the president.
Even though three business groups have applied for the stock exchange, due to the power struggle between the two, it is not possible to decide who will get the license.
When the proposal of the Minister of Finance to form a study committee on the stock exchange license was not taken by the Council of Ministers, the then Minister of Finance Dr. The differences between Prakashsharan Mahat and Prime Minister Pushpa Kamal Dahal Prachanda had increased.
Later, on the initiative of the Prime Minister, a study committee was formed under the leadership of Chintamani Sivakoti, a member of the Board of Directors of Nepal Rastra Bank. Although the study committee has submitted its report, it has not been made public.
The currently operating securities market, Nepal Stock Exchange, has investments from Rashtra Bank and the government. The government gave leadership to the director of Rashtra Bank to study the issue of giving another license to the private sector.
Ex-Chairman of the Board and Ex-Governor Dr. Chiranjeevi Nepal says that it is irresponsible of the government to keep a board that regulates a sensitive market like securities without an executive chairman for five months.
“The government talks about prosperity, but the 40 billion securities market has been without an executive chairman for five months,” he said.
Nepal said that not appointing a president for five months is a moving example that the country’s leadership does not want the country’s economic prosperity.
It is not only the government’s indifference in regulating the capital market, which is the basis of the government’s economic prosperity. It seems that the government has a good shadow on it,’ he said, ‘which is also confirmed by the fact that the president has not been appointed for five months.’
48 billion public issue stalled
Since the Securities Board has been without an executive chairman for five months, the public issue worth 47 billion 989 million 2000 rupees has been stalled. Even after applying to the board, the public eviction could not be done because it was not approved.
According to the board, the applications of 27 billion 93 crore 44 lakh 38 thousand of 35 companies for IPO issue are pending. Similarly, the FPO worth 294,439,000 rupees of five companies that have applied for more public issuance of securities to adjust the capital structure and mobilize more capital has also been stalled.
Companies in need of new project development and additional capital have applied to the board for raising capital through rights. 6 billion 21 crore 41 lakh 25 thousand rupees of 13 companies are in the pipeline in the board, but it has not been approved due to lack of board chairman.
Likewise, the bond worth 6 billion rupees to be issued by the two banks for capital fund management and resource management has not been approved by the board. The public issue of mutual fund units worth Rs 7 billion 95 crore of nine collective investment scheme funds has been stopped in the pipeline.
Narendra Kumar Rana, who became a director with executive powers in the first week of May, has taken authority from the board for public eviction.
However, due to the criticism that the staff of the board had appointed a person who did not even have general knowledge of the securities market as the executive chairman, he had not only approved the public eviction, but had not made any policy decision as the executive head.
Another director of the board says that when making policy decisions in an office that does not have an executive head, it is not possible to make a decision about who will take responsibility for it, including public expulsions. Sources claim that despite Rana’s efforts, he withdrew after public questions began to arise.
The government is preparing to appoint a new chairman after the sharp criticism. Sources said that the candidates shortlisted by the Ministry of Finance on Thursday may have to call and submit the action plan within a day or two and be ready.
However, by Friday evening, no information has been received for the presentation of the action plan and the interview, said one of the shortlisted contenders.
