Nepal Bank FPO listing hits another bump; SEBON to take decision at the earliest

Nepal Bank Limited had issued a FPO few months’ back which went undersubscribed. The FPO shares that haven’t been listed yet, have hit another bump in the process of listing due to which investors have to wait for some more time.

Nepal Bank Limited sent a letter to the Securities Board of Nepal (SEBON) regarding the transfer of ownership of FPO shares, urging the board to rethink the terms of the deal. Along with Nepal Bank, the underwriter merchant banks of the issue have also urged SEBON for the same. The officials of the mentioned banks believe that the issue did not take place as per the agreed terms due to which they said letter has been sent to SEBON.

Before the issue of the FPO, the underwriters of the issue had an agreement to transfer the shares directly to a third party, but as per SEBON there is no pin point law that allows the same. SEBON directed the underwriters to obtain the shares themselves and then send it to the third party via secondary market after listing of the mentioned shares. Due to this disruption, Nepal Bank and underwriter merchant banks have urged SEBON to rethink this decision.

As per the Spokesperson of SEBON, Mr. Niraj Giri, the board is currently discussing the issue and since the investors have already waited for a long time, the final decision is expected to come as soon as possible. He also added that the final decision is entirely in the hands of the board and it cannot be ascertained without detailed discussion, considering all the aspects of the issue.

Since, the parties to the agreement are not ready to change their stand, the listing process that was already delayed and should’ve been completed at the earliest, will be further delayed. The investors have reached a point where their investment can neither provide return nor can they exit the investment, it has frozen due to forces beyond their control.