Kathmandu. The auction of Nyadi Hydropower Company ended on October 19, 2081.

The auction of 1,27,95,000 units of shares of the company was completed during the period. A total of 1,09,50,000 units of promoter shares, 3,45,000 units of employees and 1.5 million units of shares were issued to the locals.

Nyadi Hydropower had issued the shares to the general public on October 19, 2021. Currently, NEPSE has 73 percent promoter and 27 percent public share.

Similarly, the auction of Ankhukhola Hydropower Company ended on September 28, 2021. The company had issued 6 million units of promoter shares and 6,23,980 units shares to the locals of Dhading district.

The company had issued the IPO to the general public on September 26, 2018. Currently, the promoter share structure of the company is 75 percent and the public is 25 percent.

Similarly, the lock-in period of the shares allotted to the promoters, local residents and employees of Singati Hydro Energy has expired on April 10, 2020. The company had issued the shares to the general public on April 11, 2020.

Out of the total offered shares, 1,01,50,000 units promoter shares, 14,50,000 units local shares and 58,000 units employees were locked.

These companies are just a few examples. There are many companies that have completed the lockdown period by issuing shares. Since the Securities Board of India (SEBON) has deliberately withheld the listing regulations for 33 months, not all companies have informed that their shares have been made public after the lockdown.

There is no clear legal provision in the Companies Act and Securities Registration and Issue Regulations. Therefore, Nepal Stock Exchange (NEPSE) had sent the bylaws to Sebon for approval in April 2080. Sebon has withheld that the study is ongoing, never being the president.

As a result, the companies have not given the actual information about the shares even after the lockdown is opened. The Companies Act only states that 7 directors are required to become a public company.

The Securities Registration and Issue Regulations, 2073 BS states that securities cannot be sold or transferred within the stipulated time period. After that, there is no clear mention of how to sell it.

The promoters have been saying that the Company Act only says that 7 directors are needed and the regulations do not mention what to do after the lockdown.

A promoter said that Sebon should clearly state whether it can sell directly after the lockdown is opened or can be sold after being approved by the general meeting.

However, the officials of the board say that it will not make any difference if the company goes ahead according to the provisions of the management letter and regulations. On the other hand, the promoters also demand that there should be a clear law in the law if all the shares are to be kept in one place according to the memorandum of understanding or regulation.

When the company is converted into public and IPO is launched, it should be separated between the founder and the general public. 3 directors should be elected from the promoters, 2 from the general public, 1÷1 from the women and independents respectively.

After the opening of the company’s lock, the shares go to the general public. After all the shares belong to the general public, the board of directors is also elected by the general meeting from the general public. However, due to the lack of clear legal provisions and the Securities Board of Nepal (SEBON) deliberately withholding the listing by-laws sent by NEPSE for more than 2 and a half years, the companies have not separated public and promoter shares. Even after the lockdown, after the founders sold their shares, the board of directors brought what they wanted. If Sebon had not withheld the bylaws, the directors would have been elected by the general shareholders once the locks were opened. As a result, it has become easier to run the organization arbitrarily by selecting their own people in the board of directors, issuing rights shares from time to time, and spending arbitrarily.

Investors have complained that it has been difficult to form a professional board in the institution and maintain good governance in the institution, especially the hydropower companies are running arbitrarily. The Securities Board of Nepal (SEBON), which has been on hold since April 2080, has said that the companies can operate according to their memorandum of association and regulations. However, companies have said that they cannot move forward without clear laws.

On the other hand, NEPSE officials say that it is difficult to ask the company for clarification as to why the company has not kept the actual information as it has been withholding the bylaws for 33 months. According to NEPSE officials, the companies have been given a user and password to update their information and they can update the information given by law accordingly. NEPSE officials argue that NEPSE will not be able to do anything until SEBON amends the bylaws.