Samjhana Finance faces liquidation

CA Jagdish Bhattarai appointed as an investigation officer to finalise the process

Judges Tanka Moktan and Kul Ratna Bhurtel of the commercial bench of Patan Appellate Court today appointed insolvency expert Jagdish Bhattarai as an investigation officer to send Samjhana Finance into liquidation.
The finance company will be the second financial institution to be liquidated after Nepal Development Bank.
The central bank had filed a case at the Patan Appellate Court seeking for liquidation of the Kavre-headquartered finance company after the finance company could not improve its financial health. Earlier, the central bank had on March 24 decided to send Samjhana Finance for liquidation. It has an outstanding loan worth Rs 210 million and its non-banking assets have been calculated at Rs 300 million. Headquartered in Banepa of Kavre district, the class C financial institution has two branches, one each in Lalitpur and Kathmandu.
The central bank had sought an explanation with Samjhana Finance on why not to send it to liquidation. But it could not satisfy the central bank with its explanation. The finance company had submitted its explanation also with a proposal of new management to run it but the central bank rejected the proposal and decided to send it for liquidation.
After declaring Samjhana Finance a troubled financial institution, the central bank had last year restricted the financial institution to mobilise deposits and float loans on the basis of its weak capital base and high non-performing asset.
On June 23, the Central Investigation Bureau of Nepal Police has arrested former CEO of Samjhana Finance Hem Bahadur Gurung for isappropriating Rs 40.9 million of the company. He was arrested after Nepal Rastra Bank requested the CIB.