Kathmandu. The Independent Power Producers’ Association of Nepal (IPPAN) has demanded that the promoter shares worth more than Rs 22 billion of the companies that have been issuing initial public offering (IPO) since February 2020 be listed in NEPSE. As per the guidelines, the promoter and ordinary shares of the company have to be listed on NEPSE at the same time after the issuance of the IPO, but CDS and Clearing Limited (CDSC) has demanded that the promoter shares be dematerialized as soon as possible.
In a letter to the CDSC on Wednesday, IPPAN urged the government to dematerialize the promoter shares of all the power companies and list them in the NEPSE.
The promoter shares of 22 energy companies, including three solar power companies, have not been listed on the Nepal Stock Exchange (NEPSE) after the CDSC took an illegal stance that a separate International Securities Identification Number (ISIN) should be mandatory for promoter shares and ordinary shares. Investors of nearly two dozen power generation companies have been affected due to the illegal stubbornness of the CDSC. Energy entrepreneurs say that the investors of these companies have lost faith in the government. They also complain that it has created a situation for investors to hesitate to invest in more projects.
According to the current law, power companies are not allowed to sell promoter shares for 3 years. After 3 years, the promoter shares can be sold only if the company repays the loan of the bank. Despite this, the entrepreneurs say that it is an injustice to the investors that the CDSC has not illegally listed the shares by issuing the issue of double engine.
The Non-Resident Nepali Association (NRNA) had urged the government not to implement the provision after the CDSC stance that the promoter shares would be listed only by maintaining dual engines. The NRNA had also warned that if such provision was forcefully implemented, more investment would not come from Non-Resident Nepalese (NRNs). The NRNA had drawn the attention of the CDSC to the fact that the double engine would mortgage the property of the investors and it could spoil the investment environment of Nepal in the coming days.
According to IPPAN, in the fiscal year 2081/82, a total of 3,52,26,552 units of promoter shares of eight energy companies worth Rs 3.52 billion are yet to be listed in NEPSE. Similarly, in the FY 2082/83, 186 million 14 thousand 726 units of promoter shares worth Rs 18.60 billion of 14 companies are yet to be listed in NEPSE. A total of 22 million 12 lakh 71 thousand 278 units promoter shares worth Rs 22.12 billion are yet to be listed in NEPSE.
