No ghost companies: Sebon
KATHMANDU: Securities Board of Nepal (Sebon) is preparing to bar the directors of previous companies, which opened and suddenly vanished, from registering new companies.
“There are many companies that issued shares and vanished into thin air,” said Sebon chairman Dr Surbir Poudel talking to the newly elected committee of Society of Economic Journalists Nepal (Sejon) here today.
“To discourage the practice, we are planning to bar the directors in order to prevent fraudulent
companies,” he said adding that Sebon wants to save investors from getting cheated.
The board has also prepared a disclosure reporting format for companies other than banks and financial institutions as the latter two groups
are more transparent
due to their regulator
Nepal Rastra Bank’s
“Except banks and financial institutions, other companies are not transparent and have no proper disclosure system,” he said citing the reason for low investor attraction in the real sector companies that have less than 15 per cent presence in the secondary market. Manpower crunch and lack of teeth has hit the board, he opined. “As a regulator of the capital market, the board must have teeth — more regulations and capable manpower,” he said admitting Sebon’s weakness in acting against companies that do not follow its directives.
However, the board is not sitting idle. This
Monday, it wrote a letter
to Taragaun that manages the Hyatt Regency hotel seeking an explanation why it has not paid back the money of the preferential shares to shareholders. Taragaun has neither returned the money nor given the interest to the investors. “After the investors complained to Sebon, the regulatory authority sought an explanation within seven days,” he added.
The board is soon bringing Portfolio Management Directives — to manage the market more effectively. It has more on its plate too, like Mutual fund Act, 10-year Master Plan for long-term development of the capital market and Central Depository System (CDS).
“Probably Prime Minister Madhav Kumar Nepal during his trip to India next week will visit the CDS company and stock exchange there,” he said adding that the government has started taking the capital market seriously.