Two groups bid to revive sick Nepal Development Bank

Two groups have submitted proposals to investigation officer Tirtha Raj Upadhayay to revive troubled Nepal Development Bank (NDB).
Nimbus Group of Jagdish Agrawal alongwith World Link, ICTC Group, Golchha Group, Kailash Chandra Goyal, Ravi Singh Group, Guna Chandra Bista and others have submitted one proposal while Badri Bhattarai, current promoter of NDB, and his group have submitted another proposal.
"After investigation, we found that NDB has Rs 90 million cash but the deposits of the public -- except organisations -- come to around Rs 350 million," said Upadhyaya whom Patan Appellate Court on July 29 appointed the investigation officer to report and start the insolvency process.
The Court has ordered that small depositors be paid first. "If Rs 90 million is distributed among the public depositors, they will one get just one-fourth of their real deposit," he said adding that the definition of small depositors was also unclear.
"Revival of the troubled bank might be the best option," he said adding that he has called both the groups to discuss their detailed capital plan. "After meeting both the groups and discussing their proposals in detail, if I am convinced I will advise the court to revive the bank," the senior Chartered Accountant by profession Upadhayay added.
Nimbus Group and its associates are ready to deposit Rs 32 million as and when Nepal Rastra Bank (NRB) asks and also to prepare a capital plan within three months. "We are planning to inject Rs 320 million after detailed study," said Sudarshan Raj Pandey, a representative of the Nimbus Group that also plans to buy out the promoters who are responsible for damaging the bank. "We will buy the shares of the promoters responsible for damage to the bank at one rupee per share and buy them out," he said adding that after that they plan to issue rights shares to increase the capital to Rs 640 million by the end of 2010.
If the rights shares are not sold completely, we will buy them," Pandey said assuring the depositors that if they want to take their deposit back after Nimbus starts running the bank, they will be allowed to do so.
The other group led by Badri Bhattarai has claimed that it is ready to inject Rs 640 million but has not elaborated its plan.
Meanwhile, the Supreme Court has declined to issue a stay order as demanded by the Employees' Provident Fund (EPF) to protect its deposit in the process of liquidating NDB.Directing to return the deposit of the small depositors first, Patan Appellate Court had okayed the liquidation of NDB. The court has directed to start the process of liquidation as per the Insolvency Act 2007.