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Govt asks Nepse to de-list NBL’s shares
KATHMANDU, JAN 13 - Nearly two months after the share trading-suspension of Nepal Bank Limited (NBL), the government has directed the Nepal Stock Exchange (Nepse), nation’s sole secondary stock market, to initiate the bank’s shares de-listing procedures, eventually ending the deadlock.
A senior official at the Ministry of Finance (MoF) told The Kathmandu Post, that the ministry has already forwarded its letter to Nepal Stock Exchange (Nepse) to initiate its action to de-list NBL’s shares from the secondary market.
"After an in-depth discussion with various stakeholders, we have principally agreed to de-list the NBL’s shares from the secondary market. The ministry has already forwarded its direction to the Nepse in this regard," said Krishna Gyawali, Joint-Secretary at the MoF.
The Nepse, which is the ultimate decision-maker in this regard, had decided to suspend the trading of the NBL’s shares on November 17 last year. However, such decision of the Nepse had come only when the bank itself had requested to de-list its shares from the secondary trading.
Meanwhile, a high level official at the Securities Board (SEBO), the regulatory body of stock market hinted that the Nepse might take the de-listing decision soon, eventually ending the share-trading deadlock.
Talking to The Kathmandu Post, the source also added that there is no way for the Nepse, but to de-list the NBL’s share-trading at this moment.
"Trading-suspension can’t go for long time. The Nepse will decide in favour of the bank management that has vowed for the shares de-listing," the source further explained.
The Nepse, during early December last year, had sought legal assistance to resolve the deadlock after NBL strongly argued to de-list its share from the secondary stock market. The bank had urge that its share needs to be de-listed as they were traded at more than par value despite suffering negative net worth. "This indicates, the market is working against its fundamentals," the bank then had urged with the Nepse demanding immediate de-listing of its shares.
Officials at the Nepse, however, said that they are in wait-and-see situation. "We are only observing the situation right now," said he. "And are analysing pros and cons of post de-listing situation."
The source, meanwhile, said that the Nepse fears that the de-listing would give a wrong message among shareholders on the role of the Nepse. "Nepse simply can’t ignore the interest of shareholders. So we will take time before taking any decision in this regard," he added.
The government, one and a-half year back had awarded the management-contract of the NBL, the nation’s oldest bank, to Ireland-based ICC group to revive the technically insolvent bank. Majority of the NBL’s shares is owned by the private sector against the government’s hold of 39 per cent. Posted on: 2004-01-14 04:01
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