NBB told to defer AGM until share problem resolved

KATHMANDU, FEB 22

The Nepal Stock Exchange (Nepse) on Friday directed Nepal Bangladesh Bank (NBB) not to hold its annual general meeting until the problems related to the 

ownership transfer and clearance of its shares are resolved. The bank has scheduled its 19th AGM for March 11. 

The Nepal Stockbrokers Association has decided to stop trading NBB shares since they could not be cleared and their ownership could not be transferred after the Kathmandu District Court barred transfers on Dec 5.

The heart of the problem lies in a dispute between the NB Group and another big shareholder Nirmal Pradhan’s group. The court has prohibited Pradhan from selling and transferring the shares he had obtained as collateral to help the NB Group pay off its bank debts. When Pradhan started selling these shares, the NB Group went to court in a bid to stop him. 

Nepse General Manager Sitaram Thapaliya said they had asked NBB to defer its AGM in order to protect the interest of investors. According to him, Nepse issued the order after a number of investors who had bought NBB shares complained that they could get the ownership transferred.  

Out of the 220,000 shares sold by Pradhan, the ownership transfer of 118,000 shares has been completed. Due to this hitch, around 1,000 investors have been affected. As NBB has announced the issuance of 10 percent bonus shares and 7 percent cash dividend, the buyers of its shares are desperate to have the ownership transferred. 

In the present situation, the sellers who have not had the ownership transferred may get the dividends instead of the buyers. Investors who have bought NBB shares have been insisting that the dividends should be issued to them.

“We hold the right to receive the company’s dividends for the shares that we have bought before it announced the book closing,” said investor Suman Kumar Rijal who has not been able to get the ownership transferred to his name. 

He added that they were in a wait and watch situation before they would take any further steps.  “If the buyers fail to get the ownership transferred to their names on time, they will not get the dividends provided by the company,” said Anjan Raj Paudel of Thrive Brokerage House.

Due to the confusion, stockbrokers have stopped trading NBB shares since Sunday. Narendra Kumar Sijapati, president of the Nepal Stockbrokers Association, said they had to take such a decision to protect investors. “If the ownership is not transferred, Pradhan should compensate those who have bought NBB shares from him,” said Sijapati.

Meanwhile, a meeting of the association on Friday decided to continue the halt in trading 

NBB shares. Sijapati said they would wait for the regulators’ directives before resuming share transactions.

As Nepal Credit and Commerce Bank has not been able to operate smoothly due to the conflict between the two groups, Nepal Rastra Bank recently took over its management. Similarly, National Hydropower Company, in which both groups own shares, has not been able to function properly due to the clash between them. 

Meanwhile, stockbrokers have also refused to trade shares of National Hydropower Company. According to Paudel, they stopped dealing in its shares as it has not named a sales manager. “Despite our repeated pleas, the company is yet to appoint a sales manager.”