Nepal | July 03, 2020

Govt on course to shut National Trading Ltd

Sujan Dhungana
Share Now:

File – National Trading Limited. Photo: Bikesh Prajapati/THT

Kathmandu, June 19

After repeated failed attempts to turn it around and pouring in billions of rupees over the years to keep it afloat, the government has finally decided to cut the lifeline of National Trading Ltd.

Stating that NTL had been incurring losses since many years and was only drilling a bigger hole in state coffers, the government had also introduced the ‘voluntary retirement’ scheme for NTL employees a couple of months ago, hinting at the possibilities of either liquidating or changing the entire management of the entity.

With its balance sheet spattered in red since the last one decade, NTL has outstanding loans amounting to a whopping Rs 1.4 billion that it owes to the government and financial institutions.

“All 264 staffers opted for the Voluntary Retirement Scheme of the government and their applications have been approved,” Laba Raj Joshi, general manager of NTL, said, adding that NTL subsequently stopped all trading and business activities last week.

According to Joshi, the earlier managements of NTL had engaged in such large scale irregularities that the entity was unable to make a turnaround despite several
noteworthy attempts made by the current management and the government.

Even though it has been confirmed that NTL will no longer operate under the current management and format, the government remains undecided about the final fate of the enterprise.

MoS Secretary Prem Kumar Rai said VRS was introduced at NTL, as the enterprise had stopped being commercially viable many years ago and the government had to bear huge financial losses in just covering the operational cost of NTL. “We have formed a committee to study the prospects of re-operating NTL in a newer format and ways to make the entity commercially viable,” Rai said, but he hinted at the possibility of shutting the enterprise if its revival would not yield any benefits.

Getting a new management to take over the enterprise could be quite challenging, though, as the financially handicapped NTL still needs to clear Rs 1.4 billion in dues to the government and financial institutions and would need to cough up Rs 1.6 billion for its staffers under VRS.

NTL was established as a public limited company in March 1962 to channelise commodity aids from China and what was then the Soviet Union to meet the local cost of development projects initiated by these countries through the sale of aid goods in the domestic market. In order to create a better channel to serve the growing needs of the national economy and the people at large through a regular supply of essential goods at reasonable prices, the government later set up the NTL as a state trading organisation.

But years of inefficient management and scandals that surfaced over the years have tarnished the reputation of the state enterprise. The budget of 2016-17 had announced that loss-making public enterprises, including NTL, Nepal Food Corporation, Agriculture Input Company and Timber Corporation of Nepal, would be merged to form a national supply company.

However, former finance secretary Rameshwor Khanal opined that NTL should be shut, as domestic private sector had wholly taken over the export-import responsibility that NTL had been assigned during its establishment.


A version of this article appears in print on June 20, 2017 of The Himalayan Times.


Follow The Himalayan Times on Twitter and Facebook

Recommended Stories:

More from The Himalayan Times:

TUTH. Tribhuvan University Teaching Hospital, Teaching Hospital, Maharajgunj

49-day-old infant diagnosed with Covid-19 passes away in Kathmandu

KATHMANDU: A 49-day-old infant diagnosed with Covid-19 passed away on Wednesday evening at Tribhuvan University Teaching Hospital (TUTH), where he was receiving treatment. Ministry of Health and Population, in its regular press briefing, confirmed the passing of the baby. The infant -- resident o Read More...

PM advised to reach out to rival NCP faction

Kathmandu, July 1 A day after Prime Minister KP Sharma Oli was asked by Nepal Communist Party (NCP) Standing Committee members to resign from both the posts of prime minister and party co-chair, the PM was advised by his aides in the party to reach out to the rival faction. Oli held a meeting Read More...

Nepal could witness yet another huge locust invasion

Kathmandu, July 1 The Locusts Information Centre has warned that a large swarm of locusts is likely to enter Nepal from India over the next couple of days. According to the centre, the swarm of locusts is headed towards Darjeeling from Bhagalpur and Motihari in Bihar. As the swarm is likely to Read More...

Hunger strike by youth activists enters sixth day

KATHMANDU, JULY 1 Iih, 26, who initiated ‘Enough is Enough’ campaign demanding effective handling of the COVID-19 pandemic by the government, has been on fastunto-death in a sattal (rest house) at Patan Durbar Square as his hunger strike entered the sixth day today. Iih has been joined by Read More...

‘Citizenship bill not inclusive’

KATHMANDU, JULY 1 Although the constitution is progressive in terms of citizenship issues it does not guarantee equality. Even after five years of the promulgation of the constitution, necessary amendments have yet to be made to Citizenship Act-2006, as per the provisions of the constitution. Read More...

Obrador

Mexican president to hold first meeting with Trump, Democrats unimpressed

MEXICO CITY: Mexico's president and his US counterpart Donald Trump will hold their first meeting on July 8 in Washington, officials said on Wednesday, sparking complaints from Democratic lawmakers, who saw it as a political stunt with elections looming. President Andres Manuel Lopez Obrador ha Read More...

Twitter removes image tweet by Trump over copyright complaint

Twitter Inc has taken down an image tweet by the US President Donald Trump on June 30, in response to a report from a copyright holder. Twitter now displays the message “This image has been removed in response to a report from the copyright holder,” in place of the tweet. News website Axio Read More...

Gunmen kill 24 people in attack on Mexican drug rehab center

MEXICO CITY: At least 24 people were killed in an armed attack on a drug rehabilitation facility in the central Mexican city of Irapuato, Mexican police said on Wednesday, underlining the challenge the government has in fulfilling a pledge to stop gang violence. Police in the city in Guanajuato s Read More...