Nepal Development Bank Liquidation: Collateral land under the hammer; Nepal Army buys it
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KATHMANDU, JAN 23 -
The Nepal Army (NA) has purchased a plot of land in Chitwan—which had been put up as collateral at now-liquidated Nepal Development Bank (NDB)—at auction. The land belonged to Holy Land International School.
Although the liquidator, Narayan Bajaj, had put forth a condition that NDB stakeholders cannot compete in the bidding process, NA, which wants to run the school, fought a legal battle and forced the liquidator to issue a new condition.
The Army paid Rs 141.2 million for the land at the auction where it was the only competitor. The land has already been transferred in its name. The bank owes Rs 176.3 million kept as deposits to the Nepal Army Welfare Fund.
“Prospects of running the school are good as there are facilities like swimming pool and helipad,” NA Spokesperson Ramindra Chhetri said. “However, we have not yet taken a decision in this regard.”
The Army has been operating schools in Dhankuta, Pokhara, Surkhet and Kathmandu Valley. It purchased the land with resources from the fund as the issue of repayment of its deposits frozen at the bank is under consideration in a court.
The bidding published on June 7 had called for the auction of 10 bighas of land occupied by the school and another 10 bighas of Nepal Cooperatives. However, the Appellate Court forwarded a stay order on the auction after the Army filed a case to review the bid.
The Army was critical about the bid call which didn’t clearly state the minimum price of the property. It had suspected irregularity, saying that the liquidator failed to relay adequate information. The liquidator had priced the land at the rate of Rs 70,000 per bigha—less than the government rate. The Army had agreed to pay Rs 300,000 per kattha although the government rate in the area is Rs 100,000 per kattha. The Army also expressed its concern about the short deadline of the bidding. The liquidator had fixed a 15-day deadline against the official deadline of 35 days.
The court had ordered a re-tender by forming an evaluation committee with coordination with the Army, Employees’ Provident Fund and Nepal Rastra Bank. The committee then put forward a notice after revising the price. The Army had proposed Rs 100 more than the quoted minimum price.
NDB owes Rs 320 million to EPF. Both the army and the EPF have so far recovered Rs 11 million each.
Previously, the liquidator distributed the amount recovered from the auction of the bank’s fixed assets equally to the depositors, but later it decided to pay on the basis of the amount of deposits. After that, NA has filed a petition which is under consideration in the court.
Posted on: 2012-01-23 09:01
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