Anti-graft body seeks details from NRBThe Commission for Investigation of Abuse of Authority (CIAA) has sought details from the Nepal Rastra Bank (NRB) and other concerned agencies regarding Ncell’s dividend repatriation.
The Commission for Investigation of Abuse of Authority (CIAA) has sought details from the Nepal Rastra Bank (NRB) and other concerned agencies regarding Ncell’s dividend repatriation.
In between mid-August and mid-September, the NRB had allowed Ncell to repatriate profit of Rs8.36 billion earned in the fiscal year 2011-12.
The dividend repatriation issue ran into controversy following revelations that it was done against the instruction of the Parliamentary Finance Committee (PFC).
The PFC had directed the Ministry of Industry (MoI) and the Ministry of Finance (MoF) to entertain Ncell’s proposals to raise paid-up capital and launch commercial schemes only after the telecom company settled the capital gains tax issue. The government has not received full capital gains tax from the telecom operator after it was sold by TeliaSonera to Axiata.
As per the letter obtained by the Post, the CIAA has asked the central bank and other concerned government agencies to submit details regarding the issue within three days.
NRB Assistant Spokesperson Rajendra Pandit confirmed that the central bank had received a letter from the anti-graft body.
Companies like Ncell established through foreign investment are entitled to repatriate profit earned in Nepal and this right has been enshrined through the Foreign Investment and Technology Transfer Act. Based on this provision, companies established through foreign investment have been transferring profit earned in Nepal.
The Ncell’s failure to substantiate the origin of the Rs22 million capital injected into the company out of initial foreign direct investment (FDI) of Rs80 million was the main reason why NRB had not allowed Ncell to repatriate dividend earlier. The NRB on Monday claimed that the Ncell made fresh injection of Rs22 million in the last fiscal year and had fulfilled all due processes before remitting the profit earned in Nepal.
“The permission was given after the Nepal Telecommunications Authority (NTA) on July 11 wrote to the NRB, informing that foreign exchange facility could be extended to Ncell to remit the profit if the company has submitted documents on revised shareholding structure, tax clearance certificate, audit report and a copy of decision taken by the annual general meeting on dividend distribution,” NRB Spokesperson Narayan Prasad Paudel told a press meet on Monday. “The NTA had also enclosed a letter issued by the DoI, which stated the same thing. So, we followed all due processes while allowing Ncell to remit the profit.”
However, the NTA and the DoI declined to verify claims made by the central bank.
A senior NTA official told the Post on Monday that the telecom sector regulator had not issued such a letter as claimed by the NRB. The DoI, on the other hand, said it had only explained the process of dividend repatriation in a letter written to the NTA.
Recommendation not made: NTA
KATHMANDU: The Nepal Telecommunications Authority (NTA) has refuted claims made by the Nepal Rastra Bank (NRB) that the telecom regulator had recommended release of Ncell’s withheld dividend for repatriation. Issuing a press statement on Tuesday, the NTA said existing laws allow the NRB and the Department of Industry (DoI) to decide on dividend repatriation of the companies established under the Foreign Investment and Technology Transfer Act. “The telecom regulator has not made any recommendation for Ncell’s dividend repatriation as reported by some media,” it said.
The NTA added that it had reminded the central bank repeatedly that the issue of dividend repatriation of Ncell “completely falls under the jurisdiction of the DoI and the NRB” and that had not made any recommendation to that effect, in an indication that dividend of Ncell could be repatriated. (PR)