Kathmandu. Sixteen months have passed since the announcement of issuing right shares to increase the paid-up capital of Himalayan Reinsurance Limited, a private sector-promoted reinsurance company.
Himalayan Reinsurance had decided to issue the right shares in a meeting of the board of directors without taking prior approval. Nepal Insurance Authority (NEA) had directed to increase the minimum paid-up capital of the reinsurer to Rs 20 billion. Immediately after the directive, the BOARD of Directors had decided to issue right shares in the ratio of 1:0.8 for capital enhancement, but the AUTHORITY had sought an explanation for not taking prior approval.
Himalayan Reinsurance had approved the proposal to issue rights shares worth Rs 8.32 billion in its general meeting held on March 15, 2080, without prior approval from the NRA. The NEA had sought clarification on the capital increase without prior approval and stopped the process of issuing the rights.
Almost two years and five months have passed since the decision to issue right shares was made public, but Himalayan Reinsurance has not received approval from the AUTHORITY to increase its paid-up capital.
NeA had directed two reinsurance companies Nepal Reinsurance Company Limited (Nepal Re) and Himalayan Reinsurance Limited (Himalayan Re) to provide rs 20 billion in paid-up capital within a year. Also, the AUTHORITY had set a deadline of 15 days for both the companies to submit the capital enhancement plan.
However, the Authority had sought an explanation after Himalayan Reinsurance proposed to issue the right shares through the board meeting without submitting a plan to increase the capital to the AUTHORITY.
A meeting of the board of directors of the company held on February 12, 2018 decided to issue right shares worth Rs 8.32 billion in the ratio of 1:0.8 i.e. 0.8 shares equal to 1 share.
In the fourth annual general meeting held on June 29, the shareholders had also expressed concern with Shekhar Golchha, chairman of the board of directors, about the updated status of the right share issue process.
Golchha had said that he had again submitted an application to the AUTHORITY for approval of the issue of right shares after the approval of the General Assembly.
