The process to appoint the chairman at the Securities Board of Nepal (Sebon) was cancelled on Friday.

The Ministry of Finance issued a notice on Friday stating that the recommendation process was cancelled. Back on January 17, the government formed a three-member committee led by the Vice Chairman of the National Planning Commission, Min Bahadur Shrestha, to recommend a candidate for chairman of the Sebon to the Cabinet. Two members of the committee were Finance Secretary Madhu Kumar Marasini and Prof Udaya Niraula.

As per the mandate, the Shrestha-led committee on February 28 invited applications from interested individuals. However, the Finance Ministry’s notice on Friday announced that the entire recommendation process was cancelled.

Earlier, responding to the committee’s call, 19 candidates had submitted their applications to lead the country’s only security board. The recommendation committee later short-listed five candidates for the interview.

The five shortlisted candidates were Nabaraj Adhikari, Chiranjivi Chapagain, Krishna Bahadur Karki, Mukti Nath Shrestha, and Santosh Shrestha. However, only two candidates, Mukti Nath Shrestha and Santosh Shrestha, appeared in the interview. Sources inside the Finance Ministry told the Post that both Shresthas were backed by the ruling party, CPN-UML, while Adhikari, Chapagain, and Karki were regarded as close to the CPN (Maoist Centre), the prime minister’s party.

After only two candidates appeared in the interview, the recommendation committee informed the three candidates—Adhikari, Chapagain, and Karki—to reappear in the interview and set a new date.

Despite this, the three did not appear in the interview the second time. As per the Sebon Act, it is compulsory to recommend at least three names to the Cabinet for the final selection.

When the committee failed to recommend three names even after the second round, the Shrestha-led committee sought legal advice from the Office of the Attorney General. The Office of the Attorney General communicated to the recommendation committee that the entire selection process would be invalid if three names were not recommended to the Cabinet.

“The Attorney General's office explained that it is not possible to recommend only two people who participated in the interview, then we, after consultation with Finance Minister Barsha Man Pun, decided to cancel the entire process,” a member of the recommendation committee told the Post.

The finance ministry official said only two candidates were present in the interview and presentation, so the recommendation committee decided not to risk recommending only two names to the cabinet, which ultimately led to the cancellation of the entire process.

“The process collapsed after a tussle between two ruling parties,” an official at the Finance Ministry said, adding that there is a confusion about what will happen next.

Sources inside the Finance Ministry said the selection process became the victim of the political power play between the UML and the Maoist Centre, leading to the cancellation of the entire process.

Sebon was established by the government of Nepal on June 7, 1993, as an apex regulator of securities markets. It has been regulating the market under the Securities Act of 2006. The governing board of Sebon comprises seven members, including one full-time chairman appointed by the government for a tenure of four years. The term of Sebon chairman has been fixed for four years, but it has been over three months that the position has been vacant. Due to the government’s failure to appoint a new chairman, security issuance applications worth billions of rupees are pending.