The
stockbrokers are not going to buy or sell Nepal Bangladesh Bank and National
Hydropower stocks from Sunday, though the decision itself is 'illegal' and
'irresponsible' as it will hit more investors.
A meeting of
Stockbrokers Association of Nepal today decided that they will not trade the
stocks of the commercial bank and hydropower company as they have been
unnecessarily dragged into the controversial transaction of the bank and
hydropower.
The proxy
war between investor Nirmal Pradhan and Nepal Bangladesh Bank promoter Laxmi
Bahadur Shrestha has hit the general investors as they will not be able to
transfer Nepal Bangladesh Bank and National Hydropower stocks they bought in
recent days.
All the 50 stockbrokers
will stop trading of Pradhan and Shrestha, the association said, asking the
Nepal Stock Exchange to solve the issue of ownership of Nepal Bangladesh Bank
stocks worth Rs 130 million sold by Pradhan. Some 1,000 investors had bought
the stocks of the bank but have not transferred ownership.
The move of
Shrestha, Pradhan and even the Nepse will help lose confidence in the stock market,
the stockbrokers claimed.
National
Hydropower has not been able to held its annual general meeting since last
three years also due to its failure in identifying the real investors. The
hydropower company has also failed to appoint a share registrar that has
created difficulty in transferring ownership of stocks lately. National
Hydropower stocks are being traded at Rs 107 per unit, currently.
Due to lack
of regulator in the hydropower sector and weak monitoring of Securities Board
of Nepal (Sebon) caused losses to National Hydropower shareholders, apart from
the notorious NB Group's financial embezzlement.
Likewise,
the Nepal Bangladesh Bank stocks problem surfaced after Pradhan sold all the NB
bank stocks – some 220,000 units – pledged as collateral by Shrestha, when getting
a loan from Pradhan. Of the total stocks, some 129,905 were with Pradhan and
the rest with Shanker Kumar Shrestha, who apparently sold all stocks deposited
by Laxmi Bahadur Shrestha as security.
After the shares
were sold, Laxmi Bahadur moved Kathmandu District Court. After showing their
internal agreement that stated ‘Pradhan was barred from selling shares pledged
as collateral’, the court ordered concerned authorities to stop transferring
ownership of stocks sold by Pradhan.
However, by
then some 1,000 investors have already bought the stocks. The 1,000 investors are
now at the loss as the authorities are not willing to transfer ownership citing
the court order.
The
front line regulator Nepse and capital market regulator Securities Board of
Nepal, both failed to protect investors' interest.
The stocks
of the Nepal Bangladesh Bank were, however, auctioned by Narayani National
Finance, from where Shanker Kumar Shrestha had taken Rs 8.75 million and Muskan
Shrestha had taken Rs 9 million on behalf of Laxmi Bahadur Shrestha.
Nepal Bangladesh Bank is going to hold its AGM
and from Monday its book is going to be closed.
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