Ban will be lifted only after NLIC submits papers: SebonSecurities Board of Nepal (Sebon) has said it will lift the ban on share trading of Nepal Life Insurance Company (NLIC) only after the latter submits necessary documents as mandated by the Securities Registration and Issue Regulation.
Securities Board of Nepal (Sebon) has said it will lift the ban on share trading of Nepal Life Insurance Company (NLIC) only after the latter submits necessary documents as mandated by the Securities Registration and Issue Regulation.
The Sebon on June 10 had temporarily banned trading of Nepal Life’s shares on Nepal Stock Exchange (Nepse) after the company made public its plans for further public offering (FPO) without obtaining the regulator’s permission.
The company had announced to float 3.95 million shares at Rs2,951 each.
Sebon officials said they have received a clarification letter from NLIC but not the detail prospectus as per the regulation. “We will only lift the ban after the company submits all the necessary documents,” said Sebon Spokesperson Niraj Giri.
As per the Securities Registration and Issue Regulations of 2008, a company must fulfil a resolution related to the new issue (further public issue) passed by the general meeting.
The laws further state if the price of the proposed issue is to be fixed higher than the face value, the methodology of fixation of price and basis and justification of the premium must be provided by the issuing company.
The company so far has defended its move. “We had no foul intentions. We had submitted a notice to the regulator and Nepal Stock Exchange before making public of our FPO decision,” said NLIC CEO Bivek Jha. “The Company understands the shareholders’ sentiments very well and is ready to follow all the mandatory guidelines.”
According to Jha, the company is currently preparing a detailed report and price analysis of its scrip which will be submitted to the board soon.
As per sources, the company and board representatives held a meeting on Tuesday to discuss the ongoing controversy and its resolution.
However, both the board and the company downplayed reports the company’s share prices would be devalued to as low as Rs1,000 as a penalty.
According to Giri, suspicions of foul play increased after the company delayed in submitting the documents even after the trading halt.
“We are always monitoring the market and will not let such issues slip without seeking detail clarification and imposing punishment on the wrongdoers,” said Giri.
On the other hand, the company officials said there is a misunderstanding regarding its decision which will be resolved soon.
“The company will rationally follow all guidelines on its part and will ensure good governance,” said Jha.
The company’s shares were trading at Rs4,888 before Sebon imposed the ban.