Infomerics places 18 Shanker Group-linked companies on negative watch amid financial crime cases

KATHMANDU: Credit rating agency Infomerics Credit Rating Nepal Ltd. has placed the credit ratings of 18 companies linked to the Shanker Group and associated business houses under “Watch with Negative Implications” after several promoters and directors became defendants in ongoing financial misconduct cases involving securities, banking, insurance and money laundering.

According to the agency’s June 2026 rating update, the decision follows legal proceedings against certain promoters and directors whose alleged involvement in financial irregularities could adversely affect the reputation, governance and financial standing of the companies concerned.

Of the 18 companies placed under negative watch, 15 have collectively obtained credit ratings covering loan facilities worth approximately Rs 104.30 billion. The remaining three entities have had their issuer ratings and overall credit assessments placed under the same negative watch category.

The move comes weeks after the Office of the Government Attorney, on Jestha 28, filed multiple cases in the Kathmandu District Court, Patan High Court and the Special Court relating to alleged offences under securities, banking, insurance and anti-money laundering laws.

The cases name 167 defendants, including 81 individuals in securities-related cases, 42 in insurance offences, 39 in money laundering cases and five in banking offences.

Companies Linked to Business Groups Under Scrutiny

Most of the companies placed under negative watch are associated with business interests linked to industrialist Sulabh Agrawal and the wider Shanker and Jagdamba business groups.

According to Infomerics, the companies have direct or indirect ownership connections with Sulabh Agrawal, Chairman of Jagdamba Holdings, Shankarlal Agrawal, Chairman of Shanker Group, and Sahil Agrawal, Chairman of Jagdamba Group.

The largest exposure belongs to Jagdamba Steels Ltd., whose rated borrowing facilities exceeding Rs33.15 billion have been placed under negative watch.

Other major rated loan facilities under review include:

Other entities placed under negative watch include Hulas Finserv Hire Purchase Ltd., Himalayan Life Insurance Ltd., and Himalayan Investment Banker Ltd., whose issuer ratings or quality assessments are also under enhanced monitoring.

What ‘Negative Watch’ Means

Infomerics clarified that placing a company on “Watch with Negative Implications” does not amount to an immediate credit rating downgrade.

Instead, the designation indicates that the agency believes there is an elevated possibility that the rating could be revised if ongoing legal proceedings materially affect the companies’ financial position, governance standards or operational performance.

The agency said it will continue monitoring developments, including:

• Progress of court proceedings;
• Any changes in boards of directors or ownership structures;
• Continuity of key management personnel;
• Liquidity and debt-servicing capacity; and
• The overall financial and operational performance of the affected companies.

According to the rating agency, allegations against promoters and directors could increase risks related to corporate governance, business continuity, liquidity management and market confidence. As a result, additional information and continuous assessment will determine whether future rating actions, including possible downgrades, become necessary.

The rating action is expected to be closely watched by banks, financial institutions, investors and bondholders, as any future downgrade could affect borrowing costs, financing access and market perception of the companies involved while legal proceedings remain ongoing.