Sunday, September 1, 2013

Bangladesh-based IFIC Bank buys first installment of NBB promoter shares



IFIC Bank – based in Bangladesh – bought 2.91 million unit of promoter shares of Nepal Bangladesh Bank (NBB) – the first among the planned three installments – from the secondary market.
One of the major promoter of the bank, NB Group has sold its 2,914,012 unit of promoter shares at rate of Rs 260 at the Nepal Stock Exchange (Nepse) today to repay its debts it had taken from various banks including Nepal Sri Lanka Merchant Banking and Finance that has been merged with NBB some three years ago in 2011, according to the central bank’s direction.
The Due Diligence Audit had fixed Rs 260 per unit promoters share price in January.
Manaslu Investment and Capital Investment – both belonging to the notorious NB Group – sold the promoter shares to the IFIC Bank.
Earlier, the central bank in had on November 8, 2012 permitted the NB Group – that has most of its members including Laxmi Bahadur Shrestha, Jeet Bahadur Shrestha and Jen Shrestha blacklisted by the Credit Information Bureau (CIB) – to sell the stake to the Bangladeshi bank and repay the loans of various financial institutions including NBB and Nabil Bank.
Sweta Securities  (Broker No 25) and Deepshikha Dhitopatra Karobar (Broker No 38) sold the shares whereas Crystal Kanchangjunga Securities  (Broker No 50) purchased them, according to Nepse.
Following the sale of the stake, NB Group has to pay back the outstanding principle and interest at the different banks including NBBL.
The central bank had a year ago penalised Laxmi Bahadur Shrestha —then chairman of NBB — for violating good corporate governance and borrowing from the NBB and Nepal Sri Lanka Merchant Banking and Finance, illegally.
Today’s sale of the promoter shares – though the first installment – has started reflecting the investors mood as the share price of the NBB has started picking up by four times to around Rs 400 from a year ago’s Rs 120 per unit.
The bank has listed its 20,103,890 unit of shares at the Nepse at the face value of Rs 100 per unit.
Nepal Bangladesh Bank – that witnessed a bank run some nine years ago also due to NB Group’s bad corporate governance – used to be traded at Rs 3,600 per unit before the central bank had to take over to save public deposit in November, 2006.
The central bank had taken over the management of NB Bank on Sunday, November 12, 2006 and sent a four-member committee led by Maha Prasad Adhikari to manage it, before the committee started investigation of fraud and manipulation against the interest of shareholders and law.


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