NTA shows concerns over Ncell share transferChairperson of the telecom regulator expresses concerns about the ongoing deal as it has been kept completely out of the loop regarding the process
Nepal Telecommunications Authority (NTA) has expressed concerns over the Share Purchase Agreement (SPA) between Sunivera Capital Ventures and Neeraj Govinda Shrestha for acquiring 20 percent stake in Ncell.
In a letter to the Department of Industry (DoI) through the Industry Ministry, the telecommunication service regulator has stated that it had not been notified about the deal.
The process of transferring local shares had begun after the Swedish company TeliaSonera announced in September that it would leave the Eurasian market and Nepal. In December, TeliaSonera stated that it had agreed in principle to sell its entire stake to Malaysian telecom company Axiata.
“We have asked the Industry Ministry and its line agencies to notify us about the ongoing development based on the Telecommuni-cations Act 1997,” Digambar Jha, chairperson of NTA told the Post.
The Article 27 of Telecommuni-cations Act 1997 states that in case a licencee desires to sell or transfer licence to any other person, the licencee and the buyer or the transferee of the licence will have to submit a joint application to the NTA stating the reason thereof along with the terms and conditions mutually agreed, for approval.
“Upon the receipt of an application submitted, while making an inquiry by the authority, if it deems appropriate to sell or transfer the licence to the person mentioned in the application, the authority shall grant approval for such sale or transfer within 30 days of receiving the application, and if it deems inappropriate to permit the sale or transfer, a notification with reason shall be given to the applicant,” states Clause 2 of Article 27 of the Telecommuni-cations Act.
According to Jha, the regulatory agency is concerned about the
ongoing deal as it has been kept
completely out of the loop regarding the process.
“The transfer of ownership is under the jurisdiction of Industry Ministry and Department. However, the NTA has some concern over the transfer of ownership,” Jha said, adding that the NTA is concerned if Sunivera Capital Ventures has the technical capability to become a part of the big service provider such as Ncell. “Basically, we are concerned about technical aspects.”
A source at the Industry Ministry said the concern put forward by the NTA has been forwarded to the Office of the Company Registrar and that they have not reached a conclusion over the concern put forward. “Article 27 of Telecommunications Act is related with license, not stakes. However, since NTA is the regulator, their concern is valid to an extent. We will come up with a conclusion soon,” the source said.
The NTA expressed concerns after the DoI has agreed in principle to the transfer of the shares with a condition that the company increases its capital and capacity.
Based on the decision, Sunivera Sunivera Capital Ventures owned by Bhavana Singh Shrestha has already started the process of buying 200,000 shares in the telecom giant at Rs100 apiece as per the documents submitted by Sunivera to the Department of Industry to start the purchasing process. This, however, is not the actual value of the share.
The actual share value will be fixed mutually by the buyer and the seller since Ncell is a private company. The price in which shares were traded will be revealed to the Office of the Company Registrar. Based on the same, the Inland Revenue Department will determine the applicable taxes. As per the DoI record, Bhavana Singh Shrestha, who is going to be the local partner of Ncell, had first registered a company named Sun Glory Investment in Nepal.
Sunivera Ventures which has been formed under Sun Glory Investment is also registered in Nepal. Though TeliaSonera had stated that Singapore-based Sunivera Capital Ventures would acquire its stake, the current process has been initiated with Nepal-based Sunivera Capital Ventures.