KATHMANDU, MAR 23, 2012
Public shareholders of National Hydropower Company have sought the
regulator’s support to pressurise the company to hold its annual general
meeting (AGM), since it has failed to hold an AGM for the last three
years.
“The company has not held its annual meeting — which is mandatory —
for the last three fiscal years which has left the public shareholders
in the dark about its financial status,” said general secretary of Nepal
Stock Investors’ Association Prakash Rajoria.
Investors have requested the capital market regulator — Securities
Board of Nepal (Sebon) — to take action against the non-compliant
company. “Different investors’ associations have lodged complaints
against the company at Sebon,” he said, adding that Sebon has the
authority to direct the company to hold its annual meeting, if it is
delayed. “Moreover, the regulator can also hold the company’s annual
meeting itself, if the executive board does not comply despite repeated
orders, and audit the company’s balance sheet,” Rajoria added.
Some four hydropower companies are listed in the share market and the
other three companies have been paying shareholders good returns,
except for National Hydropower Company which has been mired in the
majority promoters’ controversy.
The company’s stocks were being traded at as high as Rs 600 during
the capital market peak around five years back but now share prices have
plunged to around Rs 45.
“The promoter group — NB Group — that owned the majority stake then
offloaded more than 50 per cent of its shares making a huge profit. But
now the prospects of making money is low so they are shirking from even
conducting the annual general meeting,” he said.
The company’s last AGM held in 2010 had announced a cash dividend of
six per cent. “The company had set aside Rs 2 million to distribute
dividends but it did not distribute it for no apparent reason,” pointed
out Rajoria, who is also a public director of the company.
It is not a surprise that the board director of the company himself
does not know the financial status of the company. “It is an example of
the worst corporate governance and the regulator’s weakness has hurt
shareholders,” he added.
National Hydropower Company promoted by NB Group has 13,863,462 unit
shares listed at Nepal Stock Exchange with about 10 million units owned
by minority shareholders. The group also owns majority stakes at other
listed companies such as Nepal Bangladesh Bank, Nepal Credit and
Commerce Bank, Harisiddhi Bricks and Tiles Factory and NB Insurance.
In May 2009, Sebon had suspended the trading of National Hydropower
for suspicious distribution of unsubscribed rights shares but share
trading had resumed later.
Recently, the share prices of National Hydropower had gone up due to
rumours of its acquisition by Hydro Solutions but the acquisition was
aborted due to the ‘suspicious activities’ of NB Group.
The capital market regulator has asked investors a few more days to
figure out the steps that need to be taken. “We are discussing what can
be done to protect the interests of investors and make the company
compliant,” said an official at Sebon, that has the authority to punish
the company.
Source: THT
