Nepal Telecommunication Authority issues warning on Ncell share transactions

Nepal Telecommunication Authority issues warning on Ncell share transactions

KATHMANDU: The Nepal Telecommunication Authority has issued a warning to relevant entities concerning the trading of Ncell shares. A letter has been dispatched to the office of the Company Register, asserting a violation of the Authority’s regulations governing the purchase and sale of shares.

The public disclosure of an agreement to transfer 80 percent of shares in the telecommunications company, Ncell, has come to light. Axiata, the current majority shareholder, has entered into an agreement to sell 80 percent of its shares to Spectrlite UK Ltd., a company owned by Satishlal Acharya.

In addition to the ownership transfer agreement, Ncell’s Chief Executive Officer has publicly responded to the development. Despite the existence of a purchase and sale contract, regulatory approval is mandated by law.

The Nepal Telecommunication Act requires approval for such contracts and stipulates pre-approval in its regulations.

As of now, there has been no response regarding pre-approval. Purushottam Khanal, Chairman of the authority, revealed that a letter has been sent to the company registrar’s office, instructing them not to alter the representation in the company’s records until official approval is granted.

“We are closely monitoring Ncell’s situation. Despite repeated attempts, they have not provided a clear response in advance. We have communicated to them, urging a halt to any company activities until our approval is secured,” stated Khanal.

As per Telecommunications Regulations 2054 BS (1997 AD), Section 15 mandates obtaining approval from the authority before buying or selling more than 5 percent of shares. Ncell is reported to have not sought approval in accordance with this provision.

Chairman Khanal emphasized that the authority will withhold approval for the contract until all mandatory legal obligations are fulfilled. An interim court order has already been issued, restraining the company from making any alterations to its share structure. The Public Account Committee of the Federal Parliament has also issued directives to halt all related processes.

Fiscal Nepal |
Wednesday December 13, 2023, 12:11:23 PM |

Leave a Reply

Your email address will not be published. Required fields are marked *