Kathmandu. The Electricity Regulatory Commission (ERC) has further simplified the process of obtaining prior approval for the distribution of bonus shares to the licensed power companies. The 311th meeting of the Commission held on July 29, 2008 amended the bylaws to provide for the submission of a decision of either the Board of Directors or the General Assembly.
As per the existing provision, prior approval from the commission is required for the distribution of bonus shares in a way that changes the share structure by more than 5 percent. The Commission has taken this step with the objective of providing relief to the investors and companies by reducing the procedural hassles to get the same prior approval.
According to Clause 12 of the Directive on Public Issue Pre-Approval and Regulation of Electricity Companies, 2078, the companies should take prior approval if the share structure changes by more than 5 percent while issuing bonus shares. Accordingly, while submitting the documents as per By-law 17 (1) of the Bye-laws, 2076 which deals with the purchase and sale of electricity and the conditions to be followed by the licensee for prior approval, it was mandatory to submit the decision of both the Board of Directors and the General Meeting for change in the share structure as per the previous provision Point No. 7 of Schedule 7 and Point No. 5 of Schedule 8.
From now on, the approval process will proceed if the decision of either the Board of Directors or the General Meeting is submitted. Earlier, it used to take a long time to wait for the decision of both the levels, but now the process of pre-approval can be expedited on the basis of the decision of the Board of Directors.
