Ippan has warned that this move will have a major impact, especially in the energy sector. Ippan claims that even the target of producing 28,500 megawatts of electricity within 10 years, set by the Nepalese government, will become impossible.
We use Google Cloud Translation Services. Google requires we provide the following disclaimer relating to use of this service:
This service may contain translations powered by Google. Google disclaims all warranties related to the translations, expressed or implied, including any warranties of accuracy, reliability, and any implied warranties of merchantability, fitness for a particular purpose, and noninfringement.
The Board of Directors of CDS and Clearing Limited (CDSC) has informed that the Independent Power Producers Association, Nepal (IPPAN) has taken serious note of the latest decision regarding the listing of shares of the companies.
CDSC has sent a proposal to the Nepal Securities Board (SEBON) to extend the process of dematerialization (turning physical shares into an electronic system) of the founders' group of companies that are in the process of being listed in the securities market through public issue of shares and finally to issue separate (International Securities Identification Number-ISIN) numbers for the shares issued to the founders and general public of all the companies .
Ippan claims that the proposal has created more confusion and frustration among founding investors, private sector, foreign investors and general investors. Ippan has warned that, if this proposal is implemented, it will not only be contrary to the existing law, international recognition and established ISIN practice, but will have a long-term negative impact on the capital market of Nepal. This will create difficulties in domestic capital collection, investment coming through non-resident Nepalis and direct foreign investment.' In the
statement, it is said, 'This has caused serious doubts about the investment environment of Nepal, as well as the loss of confidence in the investments made by the private sector in various industries. In this way, the system of separating founder and general shares will create a situation where foreign investors cannot withdraw their investment by selling their shares, which will certainly damage the government's foreign investment promotion policy and the strengthening of the capital market.'
Ippan has warned that the move will have a major impact on the energy sector in particular. IPPAN claims that even the goal of producing 28,500 megawatts of electricity within 10 years as set by the Nepalese government will be impossible. According to the data of the Securities Board, this proposal will affect 87 billion shares worth 87 billion in 58 industries including energy, media, cement, and 53 billion shares worth 53 billion in 47 energy projects alone. In addition, the investment of 37 companies that have applied to issue shares worth 41 billion is certain to be negatively affected.
For this reason, IPPAN has requested the regulatory body to immediately dematerialize all the shares under the same ISIN number as per the previous arrangement . Also, CDSC has requested the Securities Board and the Ministry of Finance to withdraw the separate ISIN number proposal and not to proceed with its implementation.
