KATHMANDU, June 18 - The government has initiated the privatization process of Nepal Stock Exchange Limited (Nepse), the only secondary market for securities trading in the country.

Officials preferring anonymity informed The Kathmandu Post that the government presently is drawing up a model by which the stock market could be transferred to private hands.

"The government has formulated a program for the privatization of the Nepse," informed a source affiliated with the project, without adding details. The overall privatization process is expected to be completed within 2002, the official said.

The Securities Board (SEBO), the regulatory authority that oversees the stock market, is likely to invite consultants once the modality of privatization is set up.

The selected consulting team would be entrusted for upgrading the systems and rules to enable Nepse to operate as a self-regulatory organization.

The government, after obtaining the report of the consultants, will first develop a self-regulatory mechanism and then push forward with the privatization process. Further, the SEBO will also be reformed so as to strengthen its monitoring.

The consultants would be responsible for reviewing the rules and orders governing Nepse and draft relevant regulations to keep the government regulatory oversight function separate from the operation and governance of the stock exchange.

In addition, it will also develop policy options to privatize Nepse and prepare detailed plans on its proposed ownership, operation, funding and management under private ownership.

Furthermore, the team will also be responsible for establishing bylaws that are adequate to protect investors and facilitate the efficient execution of securities transactions.

The government almost a month ago, had invited consulting teams for formulating strategies and plans by which it could move forward with the corporate-governance and capital markets reform project.

The government’s initiatives to privatize Nepse follows the signing of an agreement with the Asian Development Bank (ADB) last November. The government in the agreement had pledged to send Nepse to private hands within one and half year.

Privatization of the country’s capital market is one of the prerequisites with which the ADB moved forward its financial sector reform project in Nepal. The ADB, for the purpose, is providing the government with a loan assistance of Rs 750 million.

The government, Nepal Rastra Bank (NRB) and Nepal Industrial and Development Corporation (NIDC), among others, presently have invested in the Nepse that was formed almost six years back.

The project also includes setting up of a Central Depository System in order to ensure transparency in shareholdings and to ensure safe custody and settlement of company ownership titles.

Pro-Public submits report on TRIPs

Post Report

KATHMANDU, June 18 - Forum for Protection of Public Interest (Pro-Public) that was commissioned by Nepal’s Accession to WTO to carry out a National Study on TRIPs Agreement and Policy Response submitted its first draft report today.

According to a press release issued here today, the report was prepared because of the need felt by the Ministry of Industry, Commerce and Supplies to make an informed decision on the kind of legislative and policy response to be made before and after Nepal becomes a WTO member, to effectively counter the impact of the TRIPs agreement.

The study has analysed the implementation of TRIPs agreement at the national level notably in four countries including India, Thailand, South Africa and Brazil, the release states.

The study has recommended that the transition period provided by the TRIPs agreement should be fully exploited, and if need arises an extension should also be requested. As a least developed country (LDC), Nepal is not required to comply with the requirements of the TRIPs agreement before January 2006, even if Nepal becomes a WTO member before that, it is mentioned in the release.

The report has also suggested that the government during the intervening period should prepare legislation in the areas of bio-diversity, farmers’ rights and competition. Furthermore, the report urges the government to include the provisions of compulsory licensing and parallel imports, and the exclusion of mere discoveries from patenting while amending the existing patent legislation, the release says.

Meanwhile, National Alliance for Food Security in Nepal (NAFOS), a coalition of Nepali civil society organizations, has planned to organize a series of programs to mark the day of action against the agreement on Trade Related Intellectual Property Rights (TRIPs), which the International community of civil society is observing, the release concludes.

BSML mgmt to be given to Salt Trading on contract

Butwal, June 18 (RSS)- The special general meeting of the Butwal Spinning Mills Ltd. (BSML) held here today supported the proposal to give the Mills’ management on contract to Salt Trading Corporation Ltd.

The meeting supported and approved the proposal in accordance with clause 77(3) of the Company Act-2053 B.S.

The Mills had not been making profit due to various reasons like devaluation of the Nepali rupee after an agreement was reached to buy machinery for the Mills, increase in the cost of the project due to delay in construction of the Mills, lack of maintenance and modernization of equipment and lack of regular supply of electricity.

According to executive chairman of the Mills Dinesh Raj Bhattarai, the term of the contract could be 5 to 10 years, apart from the current capital Salt Trading Corporation would invest Rs. 44.5 million and an additional 130 persons will be employed if production capacity increases.

The Mills has been producing 4 to 5 metric tons of thread every day which is targeted to be increased to 9 metric tons within the next 1 year. For this more workers will be employed and arrangements will be made for the Mills to run seven days a week by organizing three shifts for workers.

Established on Chaitra 9, 2039 B.S., the Mills has a capacity of producing 2,645 metric tons of cotton and polyester thread annually.