Complaint filed to halt Asian Life's IPO

A complaint has been registered against the primary issue of Asian Life Insurance here at the Securities Board of Nepal (Sebon).
Bishwambher Ghimire has filed a complaint to stop the issue as the company has asked to deposit Rs 100 -- 100 per cent of the face value of per unit share, which according to the Company Act should be 50 per cent as the Asian Life Insurance has not completed three years of operation.
Asian Life Insurance Company floated its 10,80,000-units -- worth Rs 108 million -- of primary shares at a face value of Rs 100 per unit yesterday. "The company was established only two years ago and according to the Company Act, it cannot ask for the cent per cent call money of the face value," Ghimire said adding that the company cheated investors by asking them to deposit Rs 100 per unit of shares instead of Rs 50 per unit.
"The company's issue is against the Company Act and Sebon Regulation too," he argued.
Sebon -- the regulatory authority of the capital market -- has committed a mistake and it should correct its mistake by immediately halting the issue, Ghimire said.
According to the Sebon Regulation also, the call money of such a company should be 50 per cent of the face value.
But Sebon director Niraj Giri said that the company has -- according to the condition of Insurance Board (IB) -- has asked for the 100 per cent call money. "The promoters have also paid the 100 per cent of their shares," he added.
After this public issue worth Rs 108 million the paid-up capital of the company will be Rs 360 million, according to Asian Life Insurance that has Rs 252 million paid-up capital at present.
Of the total issue, 43,200-units are meant for the staff of the company. Contrary to other public issues, the company has allowed people to apply for minimum 10-units also and one can apply for a maximum of upto 20,000-unit.