Kathmandu. There has been a demand to merge Himalayan Re Insurance Company with Nepal Reinsurance Company for long-term operation by retaining its branch.

The governance and corporate governance of Himalayan Reinsurance Company has been very weak at present. Questions have been raised on the operation and corporate governance of the companies after the top management and directors of the companies were involved in the insurance fraud. In the current situation, the question arises as to how the company will operate in the long run.

It is now a matter of concern how to merge the Himalayan Reel with Nepal in the coming days to prevent the closure of the organization.

Himalayan Re is a private sector company. Nepal Re is a government-owned company. The majority shares of Nepal Reema are held by the government body. Similarly, Nepal Bank and Rastriya Banijya Bank also have shares in Himalayan Reema.

The government also has investment in both the banks. Some shareholders have felt that it is necessary to merge Nepal Reema as it is a government-owned company.

Some shareholders have claimed that it will be difficult to run the company smoothly due to the absconding of the incumbent CEO of the company, the arrest of the outgoing chairman and the incumbent chairman and director and the suspension due to the case filed under the Insurance Act.

A senior shareholder said on the condition of anonymity that the government felt the need to merge Himalayan Reel with Nepal Rima at a reasonable price. He argues that there is no alternative to going for merger as the operation of the company is not easy in the current situation. According to the shareholders, this will also help the company to operate in the long run.

According to Section 142 of the Insurance Act, 2079, the incumbent officers, directors and employees of the concerned company have been automatically suspended until the case is settled.

The then chairman of Himalayan Reinsurance, Shekhar Golchha, chief executive officer Upasana Poudel, directors Shahil Agrawal and Rohit Gupta and other officials of the investment committee and company have been named defendants in the case. They have been suspended.

Uday Kumar Niraula is the chairman of the company while Dipendra Kumar Mishra and Ashish Chandra Neupane are the directors of the company.

The company has been without a CEO for a long time. Currently, Santosh KC has been orally charged. In the absence of leadership, the company is now like a mio without a mio. That is why the shareholders are demanding that the company should be merged with Nepal.

The merger between the two companies will make it one of the largest reinsurance companies in Nepal. Shareholders argue that they will benefit in terms of capital, risk appetite and administrative expenses.

At present, Himalayan Reel Insurance Authority has not considered the need for merger claiming that the company is financially sound. The company has said that there is no need for a merger as it is not in a position to run financially. There are various processes that need to be completed to merge the merger.

According to the authority, the company has now been advised to appoint a new one to the board. It has also been allowed to work as per the Good Governance Guidelines.

The ban imposed by the authority to do business till July has also been lifted. The bank has a deposit of Rs 9 billion from its capital and reserves.

The authority claims that if the company is able to recover the lost reputation, the operation of the company will not be hampered due to capital.

Currently, there are 27 individuals and companies in the major shareholders of Himalayan Reinsurance. The company also has investment in government-owned companies. Amber Providence Pvt. Ltd. is the largest shareholder in Himalayan Rima. The company has 7,056,400 units or about 6.79% shares.

Nepal Bank Limited and Rastriya Banijya Bank have 5.5 percent share.

Infinity Holdings owns 4.50 percent share, Jagdamba Motors 3.20 percent, Jagdamba Steels 2.20 percent, Bikash Dugar and Hansraj Hulaschand and Co 2 percent. There are other shareholders as well.

During the on-site inspection of the Nepal Insurance Authority, it was found that the investment limit was breached in the transaction done by Himalayan Reinsurance Company through broker number 55 i.e. Bhrikuti Stock Broking and more than Rs 2.73 billion is yet to be recovered from the broker for a long time.

According to a research report by the Securities Board of Nepal (SEBON), Himalayan Reinsurance has been listed as one of the companies involved in the controversial share trading. According to the report, Dipak Bhatta has 4.5 percent stake in Himalayan Reinsurance and Bhatta’s wholly-owned company has bought the shares from Infinity Holdings.

In this case, the report also shows that the shares of Himalayan Reinsurance Company and other companies were bought and sold and the TMS account of the company was operated by the same person.

After the investigation of the Securities Board of Nepal (SEBON), the process of taking action against various individuals and institutions was initiated. Later, a case was also filed under the Insurance Act.