Appointment of Chairman of Securities Board: Attorney General's Opinion on Proceedings

Responding to the Ministry of Finance, the sources said that the Attorney General's Office has given an opinion that the process can be continued according to the court's order.

Attorney General Ramesh Badal said that since the Supreme Court has given a short-term interim order not to cancel the process of appointing the president, they have given an opinion that the same process can be continued based on that. "It takes time for the court's decision to come, so this government cannot cancel the work done by the chairman recommendation committee formed by the previous government as it is an unbroken succession," said Attorney General Badal, "Therefore, the process was suspended from that point." From that, the office has sent an opinion to the Ministry of Finance to proceed with the process. Although the Attorney General's office has given an opinion to proceed with the old process, the Ministry of Finance has not made any decision until Tuesday.

After the tenure of the then chairman of the Securities Board, Ramesh Kumar Hamal, ended on December 20, a new chairman was appointed. The previous government formed a three-member committee under the coordination of the then vice-chairman of the National Planning Commission, Meen Bahadur Shrestha, to recommend the chairman. According to the notice issued by the committee, 19 people had applied. Among them, 5 people namely Navraj Adhikari, Krishna Bahadur Karki, Santosh Narayan Shrestha, Muktinath Shrestha and Chiranjeevi Chapagai were selected for evaluation and interview. However, apart from Santosh Narayan Shrestha and Muktinath Shrestha, three people did not attend the interview. There is a legal provision in the Securities Act that three people must be recommended. According to the procedure made by the

recommendation committee, three people will be selected from the interview and sent. But only 2 people appeared for the interview. Even then, the recommendation committee had asked the attorney general's office for an opinion on what to do next. Regarding the opinion from the Attorney General's office, the members of the recommendation committee, coordinator Shrestha, member and the then finance secretary Madhukumar Marasini and expert member Uday Niraula exchanged opinions. This is the reason why the committee decided to cancel the process itself. Along with that, the previous government again formed a chairman recommendation committee under the coordination of the then vice president Shrestha.

Meanwhile, Santosh Narayan Shrestha, one of the 5 candidates in the selection list, filed a petition in the Supreme Court demanding that the process not be cancelled. On June 18, the bench of Judge Abdul Aziz Muslim issued a short-term interim order not to implement the decision to cancel the appointment process of the Securities Board Chairman. On June 21, a joint bench of Supreme Court Justices Sapna Pradhan Malla and Balkrishna Dhakal continued the short-term interim order on June 18. Based on that decision, the court last week fixed the date of payment of the case on January 30. The court and the government have been criticized after the court extended the payee date to January 30 when the government did not proceed with the appointment process saying that the case is pending in the Supreme Court.

When the stock market is increasing daily, investors are complaining that the regulatory body of the capital market, the Securities Board, is without a chairman. Meanwhile, the court has fixed the settlement of the case after 6 months. While on June 21, the joint bench of Justices Pradhan Malla and Dhakal said on whether or not to continue the said order, 'It is not appropriate to keep an important position like the Chairman of the Securities Board vacant for a long time, and given the importance of this matter, it is necessary to submit a written answer and stop it according to law. As soon as the deadline expires, it will be submitted according to the rules.'' According to the legal experts, it is contempt of the bench to fix the case after 6 months of the priority of the short-term interim order. They say that it is not fair to set the hearing of the case after 6 months, which the bench has prioritized to do quickly.

As the board has been without a chairman for a long time, on the one hand, companies have not been able to get permission to issue all types of securities, and on the other hand, the regulation and supervision of the market has also become lax. Shrestha, the candidate for the chairman of the board and the petitioner, had previously told Kantipur that he was unaware of why the case was set on January 30. In the short-term interim order of the court, it is said that it should be done as soon as possible considering the seriousness of the case. But Paci was fixed after 6 months. I am surprised," he said. "It is mentioned in the court order that it is not good to leave the leadership of the regulatory body of a sensitive sector like the capital market vacant for a long time. When the market is growing, the possibility of manipulation is also high. At this time, the Securities Board has to regulate and supervise the market more effectively. Experts say that the absence of a chairman will increase the volatility in the market when the board should be more careful to protect the assets of investors.

'Chairman is the executive position on the board. Therefore, the director (Chairman according to the provisions of the Act) representing employees and finance does not want to take risks. Therefore, regulation and supervision are not effective,' said an expert, 'that's why the board and NEPSE have not been able to do anything even though there is a lot of movement in the market now.'

The board has been without a chairman since last December 21. For the last few weeks, the stock market has been steadily rising. A bullish market has high potential for manipulation. In such a situation, since the regulatory body board is leaderless, the finance committee of the parliament has instructed the government to appoint a chairman immediately. But the government has not shown interest in the process of appointing the president.

According to the provisions of the Securities Act, Mahesh Baral, who currently represents the Securities Board Board of Directors from the Ministry of Finance, has assumed the role of chairman. After the formation of the new government, on July 2, the Ministry of Finance sent Baral to the board as a representative of the Ministry of Finance. According to the law, Baral is currently holding the responsibility of the chairman. Baral has already distributed a merchant banking license after assuming the post of chairman, and the board sources said that they are also preparing to issue other permits, including the issue of securities.