Kathmandu. Om Megashree Pharmaceuticals Company has started working against the law. The company is going to acquire companies that are not known to the Securities Act 2063.

The company has called a special general meeting (SGM) and proposed to acquire Royal Pharmaceuticals Pvt. Ltd.

The company issued a special general meeting notice on Friday and proposed to acquire Royal Pharmaceuticals Pvt. Ltd. A special meeting has been called at the company’s premises of industry, Jugedi, Bharatpur Metropolitan City-29, Chitwan on July 12.

The meeting called by the company will endorse the report presented on behalf of the Board of Directors regarding the acquisition of Royal Pharmaceuticals Pvt. Ltd., the work carried out so far, the decisions, correspondence, the process with the regulatory body and the necessary works,

It has proposed to approve share swap ratio determined on the basis of the Dew Delegation Audit (DDA) report and its associated asset and liability valuation report and recommendations of independent valuers.

Likewise, the final memorandum of understanding (MoU), acquisition plan, business plan and other documents related to the acquisition of Royal Pharmaceuticals Pvt. Ltd. by Om Megashree Pharmaceuticals Limited will be approved. Ltd. The meeting has proposed to approve the proposal for issuance and allotment of shares of Om Megashree Pharmaceuticals Limited as per the approved share swap ratio and to amend the authorized capital, issued capital, paid-up capital, share structure, Memorandum of Association and Articles of Association if necessary due to the acquisition process.

Likewise, the Board of Directors will be authorized to make necessary amendments, modifications and implementation as per the directives, approvals or suggestions received from the Company Act, 2063 BS, Nepal Stock Exchange Limited, CDSC and Clearing Limited, Office of the Company Registrar, Department of Industry and other relevant regulatory bodies. The meeting proposes to give full authority to the Board of Directors to obtain approval, list of shares, demat and amendment of records and other necessary works.

Sebon argues that no matter what the company proposes, it would be contrary to the Securities Act.

According to the definition clause of the Merger and Acquisition Directive, 2079, “acquisition” means the act of “acquiring a corporate body registered with the Board, taking into account all the assets and potential liabilities of another corporate body of similar nature, thereby ceasing the legal status of the corporate body.” In addition, this term also means the act of acquiring another corporate body of a similar nature by a body corporate which has registered securities with the Board.

In addition, the same guideline states that “acquiring institution” means an organization that acquires all the assets, liabilities and business of another target organization.

On the other hand, in the definition clause of the Securities Act, “corporate body” means a body corporate established under the prevailing laws enabling public issue of securities. Provided that, the term does not denote a private limited company or co-operative society.

An official of the board said, “Royal Pharmaceuticals Pvt. Ltd. Ltd. Yes, Om Megashree Pharmaceuticals Limited is a company. Therefore, it is prima facie unlawful. ”

Not only the investors but also the officials of the Securities Board of Nepal (SEBON) believe that Om Megashree Pharmaceuticals is a listed company and is trying to distort the capital market by merging the company.

One investor said that such distortions have started to arise by taking advantage of the lack of a direct regulatory body of the manufacturing company. According to him, if the new leadership of the Securities Board of Nepal (SEBON) does not pay attention to this issue in time, then the companies currently in the pipeline for IPO in the board will also choose this path.

According to these investors, if this distortion cannot be stopped in time, then in the future, companies with weak financial conditions can choose this path. If the Securities Board of Nepal does not make a clear provision on such issues in the coming days, there is talk of a new game of selling shares by merging private companies with listed companies.

Investors have demanded that the board should be legally clear about merging private and public companies to solve such problems.

Om Megashree IPO was issued to the general public from March 11, 2081.

The board had approved the issuance of 18 lakh units of shares worth Rs 18 crore at the rate of Rs 100 per share, which is 30 percent of the issued capital of Rs 60 crore. Out of the total offered shares, 1,80,000 units have been allotted for the employees of the company and 90,000 units have been allotted for the mutual funds.

Similarly, the remaining 14,76,000 units of shares were issued to the general public. The company’s shares are currently locked.

Arjun Kumar Shrestha, the chairman of the company, has 6,51,000 units of shares. Likewise, Kamal Panthi owns 439,180 shares, Arjun Kumar Kafle owns 439,180 shares, Rabindra Raj Shrestha owns 49,120 shares, Netra Lal Poudel owns 39,200 shares, Sitaram Josho owns 23,000 units and Jenny Thapa Magar owns 29,040 shares. Arjun is the chairman of the company while other directors are the other directors.