Kathmandu, December 7
Companies — other than banks, financial institutions and insurance companies — listed in the share market would from now on have to get an approval of its plans and strategies from the company’s annual general meeting for the use of amount raised through issuance of rights shares and further public issue.
Securities Board of Nepal (SEBON) — the securities market regulator — has publicised this provision through a circular issued today.
“The new rules were proposed by the committee formed to recommend policy changes to make issuance of rights shares and further public issue of listed companies other than BFIs and insurance firms and were approved by the board on Tuesday,” says a media release issued by SEBON.
As per the revised rules, the companies would have to justify the ratio of issuance of rights shares and should have completed minimum of two years of operation since going public. Such companies should also have received credit rating as per the set rules and cent per cent of the issued capital should have been settled by the time of issuance of rights shares and further public issuance.
Projects should have fulfilled all required procedures like taking permission or approval before construction of the project as per the existing law. Such projects should also have already received letter of intent for construction.
Moreover, firms should inform SEBON about financial closure of the project and get the regulator’s approval at least five working days ahead of issuing a public notice of rights issuance or further public issuance.
“These provisions have been put in place to make the policies related to issuance of rights shares and further public issuance clearer and for better management of investment,” the release says.
A version of this article appears in print on December 08, 2016 of The Himalayan Times.