SEBON Clears Reliance Spinning Mills of Wrongdoing, Deems Further CIB Investigation Unnecessary

The Securities Board of Nepal (SEBON) has officially responded to an inquiry from the Central Investigation Bureau (CIB) concerning the financial statements of Reliance Spinning Mills. In its comprehensive reply, SEBON has asserted that there is no substantiated evidence of any irregularities within the company's financial reports, thereby rendering further investigation by CIB unnecessary.

This response, dispatched on the 24th of Shrawan, comprises an extensive 48-page document. Within this detailed correspondence, SEBON meticulously outlines that the financial statements show no signs of deliberate manipulation. Consequently, it has been determined that additional investigative measures are unwarranted.

The letter further underscores that the valuation process adhered strictly to the provisions set forth by the Securities Act 2063, the Securities Registration and Issuance Regulations 2073, the Securities Issuance and Distribution Guidelines 2074, and the Book Building Guidelines 2077. SEBON also highlighted that SAR Associates, responsible for validating the company's financial data, projected earnings per share of 0.96 paisa for the first quarter of the fiscal year 2080-81, with an annual projection of Rs. 32.90 for the same fiscal year. Upon thorough review, SEBON found these projections neither unrealistic nor made in bad faith, thereby confirming that there was no violation of Section 97 of the Securities Act 2063.

As a result, SEBON has concluded that the financial statements are free from any malfeasance, and the necessity for CIB to proceed with further investigation is negated.

The CIB's inquiry was prompted by a complaint alleging fraudulent activities within the company's financial reporting. On the 26th of Ashadh, CIB formally requested clarification from SEBON. In accordance with statutory obligations, SEBON provided its comprehensive response within the stipulated 30-day period, delivering its findings to CIB on the 24th of Shrawan.