Sunday, April 6, 2008
CHCL to issue its share at Rs.600
Chilime Hydro Power Company ltd. has decided to issue its share at Rs.600 per share. The board meeting held on 22nd march, 2008 decided to add a premium of Rs.500 on the share with the paid up value of Rs.100 and issue at the rate of Rs.600 per share. Under the company act - the organization operating in profit for last 3 years, agreed upon issuing share in premium in the general meeting of the company and having net worth more than the paid up value has the authority to issue the share at premium. Referring to the same act, Chilime is about to issue the share to the general public at premium. The company was to issue the share to the general public before three years, yet not a single share is smelt to date. The company is issuing 23.4 million shares for the general public, but it is further partitioned. Out of which 1.8 million shares is offered to the local people of Rasuwa, where the chilime hydro power plant is operating, 500 shares to the local Parwatikunda secondary school, 11 thousand 5 hundred and 20 shares to the mutual fund and 10 thousand is kept in store. The remaining 21.19 million shares are to be distributed to the general public as an Initial Public offering (IPO), issue managers being NIDC capital market and Citizen Investment Trust (CIT).CHCL has decided to sell the shares to the secondary school at Rs.100 itself. It is still to be decided at what price the local rasuwalis are receiving the shares.
Sebon uncovers scam
Investors have been, for long, complaining of foul play in the capital market. But for the first time, Securities Board of Nepal (Sebon) has uncovered what appears to be a huge financial scam in the capital market that might be only the tip of an iceburg. "Sebon has stopped the allotment process of Employment Promotion and Development Bank's (EPDB) shares until its investigation completes. It has also written to Ace Development Bank, the issue manager of EPDB's Initial Public Offerings (IPOs), to stop the process of allotment," said Dr Chiranjivi Nepal, chairman of Sebon, the regulatory authority of the capital market. "After we got complaints of foul play in IPOs, we randomly checked the collection centres," he informed, adding that the inspection team then took control of the suspected forms. "Sebon inspection team has randomly taken control of a couple hundreds of forms that are being suspected of fraudulent," said P N Poudyal, director, Market Regulation Department of the Sebon. "Such forms will be cancelled which is necessary to clean up the market," said Neeraj Giri, director at the Sebon, without elaborating on what action the regulatory authority is going to take. The EPDB had received 5,00,000 applications amounting to over eight billion rupees that it claimed to be oversubscribed by 66 per cent. It had floated shares worth Rs 128 million for public. Such incidents call for an urgency of new IPO regulation that is in offing and is expected to control such foul play.
This shows how irresponsible and careless our government is. What is the right action for the government? Just eliminate those applications or keep those applications to get the information of knowing who is doing it and taking some legal actions?
Investors have been, for long, complaining of foul play in the capital market. But for the first time, Securities Board of Nepal (Sebon) has uncovered what appears to be a huge financial scam in the capital market that might be only the tip of an iceburg. "Sebon has stopped the allotment process of Employment Promotion and Development Bank's (EPDB) shares until its investigation completes. It has also written to Ace Development Bank, the issue manager of EPDB's Initial Public Offerings (IPOs), to stop the process of allotment," said Dr Chiranjivi Nepal, chairman of Sebon, the regulatory authority of the capital market. "After we got complaints of foul play in IPOs, we randomly checked the collection centres," he informed, adding that the inspection team then took control of the suspected forms. "Sebon inspection team has randomly taken control of a couple hundreds of forms that are being suspected of fraudulent," said P N Poudyal, director, Market Regulation Department of the Sebon. "Such forms will be cancelled which is necessary to clean up the market," said Neeraj Giri, director at the Sebon, without elaborating on what action the regulatory authority is going to take. The EPDB had received 5,00,000 applications amounting to over eight billion rupees that it claimed to be oversubscribed by 66 per cent. It had floated shares worth Rs 128 million for public. Such incidents call for an urgency of new IPO regulation that is in offing and is expected to control such foul play.
This shows how irresponsible and careless our government is. What is the right action for the government? Just eliminate those applications or keep those applications to get the information of knowing who is doing it and taking some legal actions?
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