Kathmandu. Securities Board Chairman Santosh Narayan Shrestha is in a hurry to issue a license for a new stock exchange. He has moved forward by giving permission within a few days, leaving all the work of the board.
Chairman Shrestha has come under pressure after the Ministry of Finance wrote to implement the decision of the Council of Ministers on 2081 Poush 5. Chairman Shrestha has held two board meetings after the Ministry of Finance wrote to him. The second meeting was held on Thursday, Magh 24, after most of the directors expressed their opinion that new stock should not be allowed in a hurry in the first board meeting.
The decision of the Nepal Government Council of Ministers in the meeting was to study the letter received from the Ministry of Finance and the study report led by Chintamani Shiwakoti.
Two important board members were not present in the meeting. Tulsi Prasad Ghimire, representing the National Bank, and Gokarna Raj Awasthi, a board member from the Federation of Nepalese Chambers of Commerce and Industry, were absent. In the Thursday meeting, Chairman Shrestha had proposed to proceed with the licensing process for new stock. According to sources, most of the board members have put pressure on Chairman Shrestha not to make a hasty decision.
However, the board meeting has decided to study the study report sent by the Ministry of Finance. Three companies have applied for a license for a new stock exchange. Himalayan Stock Exchange, Annapurna Stock Exchange and National Stock Exchange have applied.
The board includes Chairman Shrestha, Joint Secretary Mahesh Baral, Joint Secretary of the Ministry of Finance, Binod Kumar Bhattarai, Joint Secretary of the Ministry of Law, ICAN representative Dil Bahadur Saru Magar, Gokarna Raj Awasthi, and expert member Bhola Nath Dhungana.
Himalayan Stock Exchange is led by businessman Deepak Bhatta, while Annapurna Stock is led by media entrepreneur Rameshwor Thapa. Similarly, National Stock Exchange is led by Upendra Mahato along with non-resident Nepalis. A tripartite corporate war is underway to get the stock into their company. The issue of new stock permission has even entered the parliament. The chairman of the main opposition party, CPN-Maoist, Pushpa Kamal Dahal, has accused the government of issuing licenses by making guidelines that are not envisaged by the law for middlemen. He has also said that if it is necessary to issue licenses, they should be issued through bidding after completing the legal process.
A case has been filed in the Constitutional Bench of the Supreme Court alleging that the process for issuing licenses for the new stock exchange is not in accordance with the law. Law student Krishna Bahadur Thapa filed the case on Poush 23, alleging that there was a legal error in distributing the new stock licenses. The next hearing of the case, registered with registration number 081-wc-0035, has been scheduled for Falgun 21.
The first hearing was scheduled for Magh 9, but the hearing could not be held due to lack of time. The writ petition is now being heard on Falgun 21 in a bench headed by Chief Justice Prakash Man Singh Raut of the Supreme Court. The senior-most judges in the constitutional bench headed by the Chief Justice are Sapana Pradhan Malla, Kumar Regmi, Dr. Manoj Kumar Sharma and Dr. Kumar Chudal.
The writ petition states that the Nepal Securities Board is trying to establish a corporate body to operate the securities market by misinterpreting Section 118 of the Securities Act, 2063. The hearing of this case has been fixed for Falgun 21.
The writ claims that the board has issued the ‘Directive on providing recommendations from the board to establish a corporate body for the operation of the securities market, 2079’ using its power not provided by law. Since the directive is in conflict with Section 118 of the Securities Act, 2063, it has been demanded to cancel the Directive on providing recommendations from the board to establish a corporate body for the operation of the securities market, 2079.
On 1 Poush 2081, activist Rajan Sharma Parajuli, on behalf of the Youth Campaign against Corruption, has filed a complaint with the Commission for the Investigation of Abuse of Authority, alleging policy corruption in the license of the new stock. The complaint number with the Authority is c-035384/2081/09. Complainant Sharma has claimed to have presented the basis and some facts as to how a five billion rupee commission game is being played in the new stock exchange license case.
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