NCC miffed by SEBON decision regarding share trading hurdles to directors

By A Staff Reporter,Kathmandu, July 31: The Nepal Chamber of Commerce (NCC) has drawn the attention of the Minister for Finance Dr. Prakash Sharan Mahat to the recent arrangement of the Securities Board of Nepal that directors cannot sell their shares for one year after leaving the post.

While submitting a memorandum to Finance Minister Dr. Mahat at Singha Durbar on Sunday, a business delegation of NCC led by its president Rajendra Malla said that the latest arrangement of the SEBON was impractical and discouraging to businessmen.

As mentioned in sub-section 6 of Section 14 of the Institutional Governance Guidelines of Listed and Organised Institutions issued by the Securities Board Nepal, "A person shall not be allowed to buy or sell any type of shares of the same institution as long as he remains in the position of director and for one year after he leaves that position."

The arrangement of not being able to buy and sell shares is not business-friendly, said the NCC.

According to the NCC, if any businessman cannot sell his movable property, it will also affect the diversification and expansion of the industry.

President Malla drew the attention of the Finance Minister to take initiatives to rectify the arrangement as the latest decision of the SEBON may cause disruption in household work in some cases.

He said that the decision of the Board would discourage businessmen.

The NCC has requested to amend the provision that the director cannot sell the shares owned by him even for one year after leaving the position, and to make a provision that he can sell the shares at any time.

According to Malla, the arrangement made by the Board is not in practice in any other country, including India.

The Chamber has also drawn the attention of the Finance Minister to arrange for the sale of at least 50 per cent of its shares.

Receiving the memorandum from NCC, Finance Minister Dr. Mahat said that he was positive about the attention drawn by the Chamber.