Axiata’s iffy exitThe underhand selling of a Nepali telecom giant raises questions about the commitment of our political class to national interest.
A foreign enterprise buys a big stake in a Nepali company. It reaps bumper profits for years. Then, as the day of the company’s official handover to the government approaches, the enterprise surreptitiously sells its stake and runs away. This time around, buying the stake, at throwaway price, is a Non-Resident Nepali, via an offshore destination. That is not all. Even as it is leaving the country, the foreign enterprise tells the whole world that Nepal is not a good place to do business. The level of insouciance that Axiata—the parent company of Ncell, the country’s largest operator of mobile services— has displaced in the process of offloading its Ncell stake is breathtaking. Axiata could not have pulled off this chicanery without the involvement of people at the highest levels of government and bureaucracy. Yet it will be surprising if any of these senior government officials are ever punished for trying to fleece their own country.
A raft of parliamentary committees has been formed to look into the dodgy Ncell selling. At least three separate committees in the lower house are probing it, as is a separate high-level government panel as well as the judiciary. The formation of multiple parliamentary panels could be problematic as the government will now have the option to pick from among their recommendations. Ncell has already once benefited from contradictory recommendations of parliamentary panels. In 2017, the Parliament’s Public Accounts Committee had directed the national telecom regulator not to allow Ncell to introduce 4G services until it cleared its capital gains taxes. But then the same Parliament’s Development Committee recommended the license for Ncell as not doing so, it reasoned, would violate consumers’ right to access new technology. The regulator followed the latter’s directive. Coming to 2023, there is a justifiable suspicion that the existence of so many committees could sow confusion and clear the way for Ncell’s illegal transfer of ownership. That a foreign company can supposedly throw money at our top politicians and parliamentarians, as many Nepalis now suspect, to do as it pleases raises serious questions about the commitment of our political class to national interest.
The Patan High Court thankfully has directed the government not to give clearance to Ncell’s purchase by Spectrlite UK, a fishy British entity that was erected only around a month ago. That is not enough. Nepal should pursue a legal case against Axiata, the Malaysian telecom giant, in international court. In fact, just a month ago, Nepal won a case against Axiata at the International Centre for Settlement of Investment Disputes, in a row over the determination of capital gains tax levied on the company during its acquisition of Ncell in 2016. We cannot allow a foreign company to rip our rule book to shreds. In this connection, all its enablers in the government must also be brought to book. More damaging than the image of a poor investment climate will be a perception, both in and outside the country, that anyone with money in Nepal can bend the rules to their liking.