Kathmandu. Intermediaries have started creating panic at the Securities and Exchange Board of Nepal. Intermediaries have started harassing businessmen by saying that they will not get approval unless they pay the advance commission for IPO approval.
More than 85 companies are currently in the pipeline for IPO approval. But board chairman Santosh Narayan Shrestha has put all IPO approval processes on hold. Businessmen visit the board daily for IPO approval. But board employees and the chairman say that the process is still in progress.
Ganash Karki, chairman of the Independence Power Producers Association of Nepal (IPPAN), said that the board has put the IPO approval of hydropower on hold for 22 months. Chairman Karki said, “The IPO of 43 companies has not been approved for 22 months. Earlier, it was stopped in the name of not having a chairman. Now, even after the chairman came, it is not being approved. We have met the Finance Minister, Prime Minister, Chairman of the Accounts Committee, Chairman of the Finance Committee, Chairman of the Nepali Congress, Chairman of the CPN-Maoist Prachanda, but no initiative has been taken.”
Those who invested in hydro have become disappointed with the board’s working style. Chairman Karki accused the board of stopping work and deploying middlemen. Karki added, “My hydro is also waiting for permission for IPO, they have not been able to approach me directly. Some friends have been told that the middlemen have offered to arrange the work and that large companies should pay 5 percent and small companies 7 percent commission for it.”
According to him, if a company needs to bring an IPO worth 2 billion rupees, it will have to pay 140 million rupees to the middleman. Chairman Karki says that a public company cannot give such an amount under any circumstances.
Karki claims that the Securities and Exchange Board of Nepal (SEBON) has not approved the IPO with the intention of openly hurting businessmen. Currently, 43 hydropower plants are waiting for IPO approval, while more than 400 companies are preparing to start construction. However, the board is making excuses and refusing to approve the IPO.
The board is making various excuses to prevent the IPO approval as per the law. Currently, 85 companies worth more than 55 billion rupees are waiting for approval on the board.
The board has been saying that it could not approve the IPO due to the instructions of the audit committee. But there is a demand from businesses to approve the IPO of companies that do not comply with the directive.
Chairman Karki added, “There are 41 companies in the pipeline. If we were to give permission to one company in 6 months, it would take 21 years for all the companies to get permission. Looking back, is it true that the intention was not to give it a day? Or even if it was not possible today, we would have thought about alternatives.”
Some projects have already moved forward, but 22 billion rupees are still indecisive. This capital stoppage means the entire hydro project will be stopped.
Chairman Karki added, “Now there is a buzz in the market that after a long stoppage, people are ready to do anything. Some people have started making offers like, ‘I will do it, I will arrange it.’ Where and how much should I take and pay? It becomes difficult when such things start coming up. There should be an investigation into this if they are trying to cause trouble.”
Chairman Karki is preparing to call business friends in a few days to discuss this issue. Chairman Karki says that although such incidents have occurred sporadically in the past, he has never heard of such chaos.
The appointment of Board Chairman Santosh Narayan Shrestha was highly controversial. A complaint has been filed in the investigation into abuse of authority alleging that five billion rupees were involved in the manipulation of the board chairman.
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