Merger Rumour: Sagarmatha and Himalayan General under regulator’s scanner

Kathmandu: The Insurance Board is seeking clarification from Sagarmatha Insurance Company and Himalayan General Insurance Company for spreading rumors of merger against good corporate governance. Executive Director of the IB, Rajuraman Poudel, informed that the directors of both the companies have been called to the IB for clarification after the two insurance companies made the swap ratio public in the media.

Both of them have passed an authoritative decision to the BODs to take forward the necessary process for the merger from the last AGM. Based on this, rumors were circulating in the media. However, the Board has called the company’s directors after the issue of merger and swap ratio  made public by the BODs members without any pre consent from the regulatory authority.

The Board is of the view that unethical activities being done against good governance by disclosing sensitive issues like merger. Unnecessary rumors of mergers are being spread to influence the price in the secondary market. The Board has requested the companies not to do such work.

Even if the merger is to be done, it must proceed in accordance with the prevailing laws and regulations. Although the merger is being discussed, the board has requested to move forward in secret. The board warned the companies to be vigilant in this regard due to the tendency to spread rumors of merger at the beginning but after some time the rumors will subside. When contacted by the official representatives of both the companies, they said that there was no discussion about the merger. But even the swap ratio is also being discussed in the market.

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