Kathmandu: The lingering merger process of 15 insurance companies has created chaos among shareholders as the trading in the secondary market has been in stand still for last few months.
Even though the Nepal Securities Board has arranged that the shares of the companies involved in the merger will not be suspended, the insurance companies have not yet started to open the business. Out of the insurance companies that have agreed to the merger, the shares of 15 are currently suspended in the secondary market.
Sanima General and General Insurance Company have already commenced their integrated service but their share trading has not been released by the Nepal Stock Exchange(NEPSE) yet. Similarly, the final merger agreement between Surya Life and Jyoti Life has already been signatured though the share trading will take place after integrated business.
Although the remaining 11 companies including Prime Life, Union Life, Guransh Life, Prabhu Life, Surya Life, Jyoti Life, Sanima Life, Reliance Life, Sagarmatha Insurance, Lumbini General Insurance, Premium Insurance, Siddharth Insurance, Prabhu Insurance and Ajod Insurance have not announced their final merger agreement and date for integrated business.
Despite the merger process, the companies can get recommendation from the Nepal Insurance Authority(NIA) for the release of share trading by NEPSE.
Rajuraman Paudel, executive director of the NIA, said that not a single company has applied for the release of release of share trading in the secondary market so far. According to the provision, the companies under merger process can apply for exemption from the Nepal Securities Board(SEBON) and NEPSE after obtaining recommendation from the NIA.
