25 companies likely to be delisted

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KATHMANDU, Dec 19 – Twenty-five companies presently listed with the Nepal Stock Exchange (Nepse) are likely to be delisted soon after all companies failed to report to the secondary market authorities despite the expiry of a 35-day notice issued to them.

The stock exchange recently had summoned the twenty-five companies to seek clarification over their failure to comply with the secondary market regulations. Nepse had even published the 35-day notice asking the companies to report to the stock exchange.

High level officials at Nepse, talking to The Kathmandu Post, said, "The Nepse had published a notice asking the companies to report to the secondary market. However, none of the companies turned up."

"The Nepse has initiated the necessary homework and a final decision will be taken soon. All the twenty-five companies will most likely be delisted very soon," said a high level official at the Nepse preferring to remain unnamed. "The decision will be taken by the Nepse Board."

The Nepse was prompted to issue letters to the companies after it found them of violating the secondary market operational norms. The companies had failed to either submit their financial statements to the Nepse, or to pay the registration fees, or both. Furthermore, shares of many of the companies were not traded for years.

As per the current Stock exchange Act, companies must be listed with Nepse to issue and transact shares on the Nepse floor. The delisting of the 25-companies in question will affect over 12 thousand shareholders. Company not listed with the Nepse cannot openly trade their shares and hence an investor’s investment gets illiquid.

Nepse officials are, however, confident that the de-listing of the companies would have a negligible impact on the overall share market. "Since the majority of the these companies are small companies, their participation in the share transaction is almost nil. It won’t have any impact on the share market," officials said.

Most of the companies facing to get delisted are from the manufacturing and processing group. Of the total 37 such companies enlisted in the Nepse, shares of only 10 companies were traded last year.

The latest action of the Nepse is also in line with the budgetary announcement of the Finance Minister Dr Ram Sharan Mahat who pledged to remove those companies from the secondary market that fails to issue audited financial statement for two consecutive years.

Govt to open satellite phone

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KATHMANDU, Dec 19 – The Nepal Telecommunications Authority (NTA), the regulatory body of telecom services, is making preparations to open up yet another telecom service to the private sector, as per the government’s policy of deregulating telecom services.

A highly placed government official said that the government is going to open up a satellite telephone service based upon Global Mobile Personal Communications System (GMPCS) technology, to the private sector, which will be announced through the gazette soon.

The new service is being opened to the private sector as per the sub-section 2 of section 23 of Telecommunications Act 1997. The new service is expected to be very useful for mountaineering expeditions and in the terrain of the kingdom, where distributing fixed phones is very expensive and difficult as well.

Unlike the licensing of cellular mobile phone, more than one licence would be issued to individuals and private parties, within a couple of months of formally announcing the opening up of the services through gazette. The licence fee and renewal fee for the service would be more than a million rupees, said the source.

The licence for the new service would be issued for a period of five years, which has to be get renewed every five years for as many as five times, not exceeding 25 years, if the operator wants to continue with the service.

The Authority since its establishment in March 4, 1998 has opened basic telephone service based on wireless in local loop (WLL) technology, cellular mobile phone based on Global Mobile Communications System (GSM-900), Very Small Aperture Terminal (VSAT) network providing, VSAT usage, radio paging network service, internet and email service, fax mail service and video conferencing service.

The NTA till date has issued licence for basic phone service to Nepal Telecommunications Corporation (NTC), the only operator so far, licence for cellular mobile phone to the NTC alone and licences to 13 different VSAT network providers.

Similarly, the regulatory body has licensed 22 companies as VSAT users, eight radio paging companies, of which two are for nationwide operation, 15 internet service providers (ISPs) six fax mail companies and one video conferencing licence has been issued to the World Bank Nepal Office.

The government plans to open all telecom services to the private sector by 2004, ending the long-held monopoly of the NTC especially in the basic phone service and the newly introduced cell phone service as well.

Interaction on VDIS organised

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KATHMANDU, Dec 19 – Deputy Director General of Inland Revenue Department (IRD), Avanindra Kumar Shrestha has said that voluntary disclosure of income scheme (VDIS) has said that the scheme has been introduced targeting the revenue evaders, but not to discourage business community.

The tax is not levied on property but it is an opportunity given to tax evaders for the past ten years. Those who are regularly paying their taxes need not disclose their income sources under the scheme, he added.

The deputy director general of IRD was speaking at an interaction organized by Nepal Chamber of Commerce (NCC) here today.

Speaking on the occasion, Rajesh Kaji Shrestha, president of NCC said that the VDIS has terrified the business community as it is introduced at an ill time.

"The government has introduced the scheme without making any consultation with the business community. Therefore, it is not suitable to the Nepali context," said Shrestha.

Participants in the interaction said that the voluntary disclosure of income scheme was implemented without doing proper homework.

Representatives of NCC, Nepal Overseas Export/Import Association, Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Nepal Pashmina Association, Computer Association of Nepal, Nepal Export Council, Silk Association of Nepal, Central carpet Industries Association and other business associations participated in the interaction.