Kathmandu. Employees of the Nepal Stock Exchange (Nepse) have been excited after the restructuring of the Nepal Stock Exchange (NEPSE) has moved forward.
KATHMANDU: A five-member study committee led by former chairman of the Nepal Accounting Board (NEPSE) Prakash Jung Thapa has started its work to restructure the NEPSE. With this, NEPSE employees are excited and optimistic.
Other members of the committee are Nepal Rastra Bank (NRB) Director Subhash Chandra Ghimire, Securities Board of Nepal (SEBON) Deputy Executive Director Rupesh KC, Securities Board of Nepal (SEBON) Deputy Executive Director Niraj Giri and other members of the committee. The first meeting of the committee was held on Monday. The next meeting will be held on Monday.
The government has given 50 days to the committee to submit its report on the restructuring of NEPSE. Chairman of NEPSE Employees’ Union, Nawaraj Thapa, said that they are hopeful that the restructuring of NEPSE would take further momentum under the tenure of this government. “There was talk of restructuring of NEPSE for many years. There was also talk of a new stock exchange,” he said, adding, “We had presented the restructuring models to the previous governments saying that the existing NEPSE should be made more technological.” But the work did not move forward. Now, hopes are rising. ’
Earlier, a high-level commission formed by the then government had also suggested to bring a new stock exchange along with the restructuring of NEPSE. It has been many years since NEPSE itself prepared a report stating the need for restructuring and sent it to the Ministry of Finance.
Following the recommendation of the High Level Commission, the Securities Board of Nepal (SEBON) had directed NEPSE to submit an action plan for restructuring. After NEPSE prepared the restructuring action plan, it has not been approved by the board of directors as the chairman has not come for a long time.
Presently, the paid-up capital of NEPSE stands at Rs 1 billion. Currently, the government is the largest shareholder of NEPSE. NEPSE holds 5,866,245 units (58.66%) of the government’s shares.
Similarly, Rastriya Banijya Bank is the second largest shareholder. The bank has 1,122,974 units (11.23 percent) shares in NEPSE.
Employees Provident Fund (EPF) owns 1 million units (10 percent) of shares.
Similarly, Nepal Rastra Bank has 950,637 units (9.51 percent), Prabhu Bank 500,000 (5 percent), Laxmi Sunrise Bank 5 percent (5 percent) and other groups have 60,144 (0.60 percent) shares.
What are the options for restructuring?
According to the report, a proposal has been submitted to the Ministry of Finance to increase the current paid-up capital to Rs 3 billion following the restructuring of NEPSE. The report has proposed to increase the government’s shareholding to 19.55 percent after the restructuring of NEPSE. The government will hold 58,66,245 units of shares.
Similarly, 1,122,974 units (3.74 per cent) of Rastriya Banijya Bank, 3.33 percent of Employees Provident Fund and 950,637 (3.17 per cent) of Nepal Rastra Bank have been proposed in the company.
Similarly, Prabhu Bank has 500,000 (1.66 percent), Laxmi Sunrise Bank has 5 percent (1.66 percent) and other groups have proposed 60,144 (0.20 percent) shares in the company.
As part of the restructuring, NEPSE has proposed to issue 30 percent i.e. 90 units of shares to the general public.
Similarly, 6.5 million units (21.67%) will be offered to domestic institutional groups and 4.5 million units (15%) to foreign strategic partners.
