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| Kathmandu Wednesday March 13, 2002 Falgun 29, 2058. |
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CAI withdrawal hits new snag
Threatens to simply denounce mgmt contract
By Yubraj Ghimire and Bhaskar Sharma
KATHMANDU, March 12 : The snag over
the divestment of 50 per cent shares by Credit Agricole Indosuez (CAI) from Nepal Indosuez
Bank Ltd. (NIBL) has taken a turn to the worse with the French group threatening to simply
denounce the management contract and its partners.
The latest threat came in a letter, sent on
Monday by CAI representative Marc Domex, Chief Executive of NIBL, to Nepal Rastra Bank
(NRB), which so far has failed to grant permission to the banking group to sell its shares
despite repeated requests.
The French banking group has been asking for the
central bank’s permission to sell its shares to local investors led by Prithvi
Bahadur Pandey and Group (PBPG) maintaining that it would sell its shares to PBPG or to no
one else.
The letter says that the group ‘will not
write anymore’ and that it would take the decision themselves if need arises. Domex
claims more than 30 letters were sent to the Nepali authorities seeking permission for
divestment, which was first announced last July.
Even the French Ambassador to Nepal Claude
Ambrosini cautioned to prevent the ‘divestment issue’ from becoming a political
problem. "Let it (the divestment issue) not be a political problem between France and
Nepal, and EU and Nepal," he said.
Ambrosini also informed that he talked over the
matter to the Nepali Prime Minister Sher Bahadur Deuba almost a month back. He said that
he urged Premier Deuba to create an appropriate environment for settling the skirmish.
"What we want is a fair and fast decision. If this is not solved, it may send a
negative signal to investors," he told The Kathmandu Post.
Both Ambassador Ambrosini and Domex expressed
surprise over the indifferent attitudes of the central bank and the government. "No
sensible progress has been made even seven months after the first request for withdrawing
investment from Nepal was made," said Domex talking to The Kathmandu Post today.
"If we don’t get permission or reply we will have no alternative but to act on
our own…..CAI will simply not sell its shares, instead will denounce the management
contract…"
The French group has also threatened to
disseminate information to the domestic and international banking community on the
decision it reaches in case the NRB prefers to remain quiet. "First it was impossible
to buy shares. Now it seems impossible to sell," Domex commented.
However, NRB Governor Dr Tilak Rawal said that
complexities that have arisen lately are causing delay in imparting a concrete decision.
The CAI had given February 15 as the deadline to NRB to answer to its queries.
"The delay is due to ongoing cases in the
courts," he said, adding, "The central bank needs to consider the legal aspects
while taking any decision." Chaudhary Group had filed cases in the Nepali courts
claiming its right to buy CAI’s share as per its past agreement with the French
banking group.
Nevertheless, Dr Rawal, defending as to why no
decision was given to CAI, said, "The central bank did not feel the necessity to give
an answer in that regard." However, he added, "We have a policy to allowing
divestment as well as repatriation of the dividends obtained from investment. So there
arises no question of preventing CAI’s withdrawal."
CAI had decided last July to retract from Nepal
after they could not obtain majority share in NIBL even after two years of its application
to the Ministry of Finance and the central bank. While CAI has a 50 per cent stake,
Rastriya Banijya Bank and Rastriya Beema Sansthan owns 15 per cent each with the rest 20
per cent owned by the public.
CAI had been asking for at least two-thirds
stake in the bank. Then Prime Minister Girija Prasad Koirala during his France visit last
year had pledged to comply with CAI’s demand. Even the French president and prime
minister had requested Koirala to consider CAI’s appeal. However, the promise
remained unfulfilled.
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