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Kathmandu Thursday December 20, 2001 Paush 05, 2058.
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25 companies likely to be delisted
Post Report
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.
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