Kathmandu. The Securities Board of Nepal has urged the public not to sell shares in the name of pre-IPO.

It has been advised not to do activities related to the purchase and sale of shares of publicly organized organizations without obtaining permission from the board. It has urged all not to engage in such activities as such acts contrary to the provisions of the Securities Act, 2063 are punishable.

The board has drawn serious attention to the issue in the context of complaints received from investors to stop the unauthorized collection of money through social media (WhatsApp, Facebook Group, Viber and SMS) in the name of pre-IPO of various organized organizations that have not been issued publicly.

The company has said that it offers to buy shares to the general public saying that it will issue an IPO in the near future. There is no provision regarding pre-IPO in the prevailing law. Sub-section (1) of Section 29 of the Securities Act, 2063 has reminded that if an organized organization sells securities to more than 50 people at a time, it will have to make a public issue for the sale and distribution of such securities.