Kathmandu. CDS and Clearing (CDSC) Limited is engaged in dematerializing the securities of companies listed in NEPSE. It is also the main body responsible for the protection of ownership, deposit, export and transfer of securities. It also bears the responsibility of the facilitator to create an investment-friendly environment by making the capital market systematic and transparent. But the CDAC, owned by the Government of Nepal, has stopped the lock-in and dematerialization process of companies without law.
There are clear provisions in the Securities Registration and Issue Regulations-2073 and Securities Issue and Allotment Directive-2074 for lock-in and dematerialization of securities of listed companies in NEPSE. According to the Regulations and Guidelines, the promoter shares will have a lock-in period of 3 years from the date of allotment. After that, securities can be bought and sold like ordinary shares. However, the CDSC has stopped the process of dematerialization of companies, citing the provision of double IGN against the legal provisions.
The illegal and prejudiced attack of Prabin Pandak, who is the head of the CDSC, has demoralized the investors. Various facts and events have shown that she has been influencing and misleading not only the government and the concerned bodies but also the court to fulfill her vested interests.
The biggest and deadliest weapon that Pandak has hung on investors is the provision of dual engines. Investors are protesting against the provision of separate IGN for promoter shareholders and general shareholders. A complaint has also been lodged against him at the Commission for the Investigation of Abuse of Authority. More importantly, the Securities Board of Nepal (SEBON) has not even approved the directive on dual IGN proposed by the CDSC. Therefore, it has not acquired legal status. However, CDSC CEO Pandak has blocked the process of dematerializing the shares of NEPSE-listed companies under the guise of the proposed directive.
Public companies like Emerging Nepal and Pure Energy are facing the brunt of the blow. Pandak has started attacking the entire stock market by leaning on the back of Emerging Nepal in the name of dual iGene. In Poush 2081, Emerging Nepal had applied to the CDSC for merging two IGIN numbers. The lock-in period of the promoter shares of Emerging had expired on January 17, 2081. The company had sent a letter to all the shares in NEPSE, requesting to maintain a single symbol and an IG for all the shares. In Poush 2081, NEPSE made the company a single NEPSE stock symbol ENL. The company, which completed all the processes from NEPSE, sent a letter to CDSC for a single IGIN. However, the CDSC directed the decision of the General Assembly to demand a single IGN. As per the directives of the CDSC, the company submitted the demand to the CDSC by taking a decision through a special general meeting in January 2081.
The company had requested to maintain a single IGN for all the shares. In this request, the CDSC said that approval should be obtained from the Securities Board. However, the CDSC refused to give a single IGN. Due to the IGN dispute between the private sector companies and the concerned bodies, the CDSC has not been able to finalize the decision and maintain transparency in the share dematerialization. Instead, a new directive was prepared and sent to the Securities Board, which has not yet been approved. Pandak has been continuously attacking the capital market on the basis of the same document that has not obtained legal status.
Pure Energy Limited is another company to bear the brunt of the strike. Pandak, who is also an advocate, has approached the court in the case of Pure and has presented wrong facts and arguments. Pure Energy is the largest private sector solar power company. Pure had applied to the CDSC for lock-in and dematerialization of shares on April 24, 2002 through the initial public offering (IPO).
According to Clause 9 (6) and Section 38 of the Securities Registration and Issue Regulations-2073 and Section 32 of the Securities Issue and Allotment Directive-2074, Pure Energy has asked the company to lock in the shares of the residents, employees and founders of the project affected area till April 23, 2005. It was requested to keep the shares issued for the mutual investment fund locked in till 10th Kartik 2082 (6 months). According to the application filed by Pure Energy with the CDSC, out of the total 8 million units listed, 64 lakh units are owned by promoters, 1,60,000 units are owned by residents of the project affected areas and 14,40,000 units are owned by the general public.
However, without any legal basis, Pandak stopped the lock-in and dematerialization process. The High Court went to Patan seeking justice against Pure Pandak. Pure has demanded an interim order not to issue the promoter shares (64 lakh shares) separately without law and to immediately materialize them. A division bench of Justices Surya Nath Prakash Adhikari and Narayan Prasad Subedi issued the order on Tuesday.
Pandak has not only stopped the dematerialization process by showing the lock-in, but has also defended her wrongdoing by going to the court as a lawyer. His planned argument has created two situations. One, the property is in the account, but it cannot be sold. Two, property does not exist in the system. At worst, Pandak’s illegal actions and machinations have reduced the value of the Rs 640 million securities (64 lakh units) of the founding shareholders of Pure. This is unexpected and ironic in the role of a responsible official who is playing the main role of a facilitator in making investors enthusiastic and disciplined and stimulating the capital market.
In this way, the head of the responsible body of the stock market has become prejudiced, not only are the investors angry, but they have also sought legal remedy. A complaint was filed at the Commission for the Investigation of Abuse of Authority (CIAA) 5 months ago against the preparation of two IGN numbers CDSC to the same company. In the complaint filed in the name of Patriotic Nepali, it has been stated that the general investor who is active in the capital market of Nepal by following the rule of law under the right to property guaranteed by Article 25 of the Constitution of Nepal is a Nepali citizen. However, the CIAA has not taken any concrete action on the complaint so far.
प्रतिक्रिया दिनुहोस्