Stockbrokers not to trade Nepal Bangladesh Bank and National Hydropower stocks
The stockbrokers are not going to buy or sell Nepal Bangladesh Bank and National Hydropower stocks from Sunday, though the decision itself is 'illegal' and 'irresponsible' as it will hit more investors.
A meeting of Stockbrokers Association of Nepal today decided that they will not trade the stocks of the commercial bank and hydropower company as they have been unnecessarily dragged into the controvercial transaction of the bank and hydropower.
The proxy war between investor Nirmal Pradhan and Nepal Bangladesh Bank promoter Laxmi Bahadur Shrestha has hit the general investors as they will not be able to transfer Nepal Bangladesh Bank and National Hydropower stocks they bought in recent days.
All the 50 stockbrokers will stop trading of Pradhan and Shrestha, the association said, asking the Nepal Stock Exchange to solve the issue of ownership of Nepal Bangladesh Bank stocks worth Rs 130 million sold by Pradhan. Some 1,000 investors had bought the stocks of the bank but have not transferred ownership.
The move of Shrestha, Pradhan and even the Nepse will help lose confidence in the stock market, the stockbrokers claimed.
National Hydropower has not been able to held its annual general meeting since last three years also due to its failure in identifying the real investors. The hydropower company has also failed to appoint a share registrar that has created difficulty in transferring ownership of stocks lately. National Hydropower stocks are being traded at Rs 107 per unit, currently.
Due to lack of regulator in the hydropower sector and weak monitoring of Securities Board of Nepal (Sebon) caused losses to National Hydropower shareholders, apart from the notorious NB Group's financial embezzlement.
Likewise, the Nepal Bangladesh Bank stocks problem surfaced after Pradhan sold all the NB bank stocks – some 220,000 units – pledged as collateral by Shrestha, when getting a loan from Pradhan. Of the total stocks, some 129,905 were with Pradhan and the rest with Shanker Kumar Shrestha, who apparently sold all stocks deposited by Laxmi Bahadur Shrestha as security.
After the shares were sold, Laxmi Bahadur moved Kathmandu District Court. After showing their internal agreement that stated ‘Pradhan was barred from selling shares pledged as collateral’, the court ordered concerned authorities to stop transferring ownership of stocks sold by Pradhan.
However, by then some 1,000 investors have already bought the stocks. The 1,000 investors are now at the loss as the authorities are not willing to transfer ownership citing the court order.
The front-line regulator Nepse and capital market regulator Securities Board of Nepal, both failed to protect investors's interest.
The stocks of the Nepal Bangladesh Bank were, however, auctioned by Narayani National Finance, from where Shanker Kumar Shrestha had taken Rs 8.75 million and Muskan Shrestha had taken Rs 9 million on behalf of Laxmi Bahadur Shrestha.
Nepal Bangladesh Bank is going to hold its AGM and from Monday its book is going to be closed.