The buyer does not have the technical and financial capacity to run the Ncell Scrutiny Committee. Ncell’s share purchase and sale study and investigation committee has submitted its report to the government. The committee headed by Tankamani Sharma submitted its study and investigation report to Prime Minister Pushpa Kamal Dahal Prachanda on Monday.
In the report, doubts have also been expressed about the technical and financial ability of the share buyer to operate Ncell. “Ncell Aziata, the largest telecommunications company in Nepal, which earns $9 billion annually, announced the commercial value of the share transaction and the terms of the contract,” the report said.
Similarly, it is mentioned that most of Ncell’s share purchase and sale has not been approved by the relevant body according to the prevailing law, and until now, no application has been submitted in accordance with the law for the approval of the share purchase and sale agreement said to have been between Aziata Group Berhad Malaysia and Spectralite UK.
In this case, the technical ability of the buyer company, the source of investment and the professional background of the company’s director, the situation of crush holding between the telecommunication service provider company and their operations, the regulation of foreign investment in the field of telecommunication flow in Nepal, the sensitivity of telecommunication service, the assurance of service operation, and the future plan of service operation are also included. have stood up.
However, it is mentioned in the report that the records and details of the transactions related to the said transactions have not been submitted by the company to the official bodies of Nepal.
“It is seen that the payment of the transactions of some Nepali shareholders was not done through Nepal’s banking system but also out of sight,” said the committee. Ncell, which currently has more than 13 million customers, has paid a total of three trillion two billion rupees to the government of Nepal through tax and non-tax revenue.
Similarly, it has been concluded that the transaction mentioned in the Ncell share purchase and sale agreement between Aziata Group Berhad and Sectralite UK on December 1, 2023, is not based on the principle of equal commercial behavior.
The selling side is dominated by the buying side, and the conditions are more than normal. Even after the sale of shares, the seller can take the dividend of the company he has sold.
During the study and investigation, the committee worked to obtain necessary documents, evidence, and share purchase and sale agreements from the Nepal Telecommunication Authority, Department of Industry, Big Tax Payers Office, Company Registrar’s Office, and Nepal Rastra Bank, and collected necessary details from the websites of various telecom companies.
The purchase and sale agreement is not suitable to be accepted as is.
The committee has mentioned that according to the law, both buyer and seller parties have not yet given an application; they have not taken approval before buying and selling shares, and when analyzing the terms of the share purchase and sale agreement, it has been mentioned that it is not in accordance with the principle of equal commercial behavior.
Analyzing the capacity of the buyer from various perspectives, the committee has suggested to the government that it is not appropriate to accept this share purchase and sale agreement as it is, as it is seen that the documents confirming the technical, financial, and managerial capacity have not been submitted.
Referring to the fact that there are large and serious scams in economic and business transactions in Nepal, the committee has suggested arranging a separate mechanism to solve them like in other countries. It has also been pointed out that there is a need for further investigation by the Nepal Rastra Bank as financial risks have been created by providing funded and unfunded loans to telecommunication service providers in Nepal.
Good governance in company administration, securities regulation, prevention of asset laundering, promotion of foreign investment, effective regulation of the banking and financial sector, transparency in foreign exchange transactions, and the need to make necessary policy, legal, institutional, structural, and procedural reforms in related fields to make Nepal an attractive destination for foreign investment. It is pointed out in the report.