The Department of Industry (DoI) has clarified it has not made any recommendation to the Nepal Rastra Bank (NRB) to allow Ncell to repatriate dividend.

In a statement, the DoI said as the case attracts the Foreign Investment and Technology Transfer Act before foreign investment are entitled to repatriate, it has not made any such recommendation. Between mid-August and mid-September, NRB allowed Ncell to repatriate profit of Rs8.36 billion earned in fiscal year 2011-12.

The DoI clarification comes after NRB defended its move to allow Ncell to repatriate dividend, stating the telecom company had fulfilled all due process. The DoI statement, however, said under the Act’s section 5 (2b), foreign investment are entitled to repatriate profit earned in Nepal. “Based on this provision, under any company’s request, it normally recommends for foreign exchange facility.”

In 2013, Ncell had sought permission to repatriate 80 percent of Rs11 billion profit it earned, or Rs8.8 billion, (before deducting taxes) in 2011-12. However, NRB could not process Ncell’s application after it came to light that the telecom company had not been maintaining the said paid-up capital.

Ncell had initially said its paid-up capital stood at Rs100 million, of which Rs80 million belonged to foreign investors and the rest Rs20 million belonged to local investors.

However, documents showed of the Rs80 million in capital that belonged to foreign investors, only Rs58 million had entered the country through formal channel. Ncell could not substantiate the origin of the Rs22 million in capital injected into the company.

“The DoI had on different occasions written to Ncell to increase the paid-up capital and update the status.”