Nepal Stock
Exchange suspended some 30 listed companies – including nine finance companies,
five development banks, one insurance company, one hydropower company, two
trading companies, one hotel, one film development corporation, and nine
manufacturing companies, apart from Nepal Electricity Authority's debenture –
due o their failure in paying their annual listing renewal fee for the current fiscal
year.
Among the
suspended companies, shares of Multipurpose Finance, Himalayan Finance,
Pashchimanchal Finance, Biratlaxmi Development Bank, and National Hydropower
Company were traded last week.
Listed
companies are supposed to pay the annual renewal fee within three months of the
end of the fiscal year, but these companies failed to pay within the deadline,
thus their trading was suspended as per regulation.
This year,
Nepse had even issued a notice for listed companies to pay the annual listing
fee on time. Companies tend to overlook the matter out of utter carelessness
which inconveniences investors.
Among the
suspended ones, three – Nepal Development Bank, Jyoti Spinning Mills and
Samjhana Finance – are going through liquidation. Share trading of Capital
Merchant Banking and Finance, General Finance, Gurkha Development Bank, Crystal
Finance and NB Insurance was suspended due to action taken against them by the
regulators.
Likewise,
nine manufacturing companies, two trading companies, and Hotel Yak and Yeti
have not been paying the annual listing fee for the last few years in the hope
of getting de-listed.
Last year,
Nepse had to suspend the trading of 45 listed companies including Nepal
Electricity Authority’s debentures. A year back, trading of 28 listed
companies, including four development banks and four finance companies, was
suspended due to a delay in paying the listing renewal fee.
Every year, Nepse has to suspend the trading of listed companies for
their failure in renewal of listing fee. The renewal fee depends on the capital structure of the
company – the maximum that companies have to pay is Rs 50,000 for those with a
capital base greater than Rs 100 million.
The
suspended companies scramble to pay the renewal fee the day the transaction is
suspended. The suspension of trading arising from sheer negligence of the
companies is also an instance of bad corporate governance.
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