Sectoral

The Crown & Business

His Majesty King Gyanendra Bir Bikram Shah Dev’s crowning and his address to the nation immediately after, have revived Nepal from the utter frustration and despair it had plunged into upon hearing the news of the blood bath at Narayanhity Royal Palace on June 1, 2001 at which King Birendra and other immediate heirs to the throne were annihilated.

In the address, the new king assured to continue the tradition of the Shah dynasty to rule according to the wishes of the people, indicating that the multiparty democracy that the new King’s elder brother Late King Birendra had nurtured so assiduously over a decade, would continue.

For the business community there was yet another reason for hope- the belief that new king has a long experience in business matters.

Though nobody has come up with any documentary proof of the then His Royal Highness Prince Gyanendra or his family members holding any stake in any of business undertakings in Nepal, the general belief is that some organizations under Soaltee Group are indirectly owned by the Royal Family. Established by King Gyanendra’s uncle who had no issue, the Soaltee Hotel and associated businesses were naturally inherited by the then HRH Prince Gyanendra and other members of the royal family.

For many, there is nothing to make a noise if the king keeps owning a business that he owned when he was almost like any other commoner. But for some foreign media, such as Zee TV, notorious for repeated instances of waging anti-Nepal propaganda, the information that the new king actually has some business interests was a scoop and they tried to make much out of that. Voices were also raised at home suggesting to make public the business interests of His Majesty the King, who, by the constitutional provisions, does not need to pay taxes.

But the business community of the country has its morale boosted to find a king with business interests. First, profit may no longer be a stigma in Nepali society, and second, the community hopes the crown to be in favor of easing the stumbles in doing business.

Whether the new king will really do something in favour of the business community has to be seen only in the future. So far, his gestures have been encouraging for business community. Out of three new royal appointees in the upper house of parliament, two are renowned business persons. However, it is very much unlikely for King Gyanendra to directly interfere in the business matter. Neither did he do that in the past. Accepted by every knowledgeable person at home and abroad as the most professionally managed business in Nepal, Soaltee Group has shown no indication so far of a prince or king being behind its business decisions. The two investment firms, Surya Enterprises and Soaltee Enterprises, that are behind the Soaltee Group operations, are managed by professionals as are the individual firms within the Group. According to the sources within the Group, the royal family members own about 20 or 22% in Soaltee Entrprisers and nothing in Surya Enterprises. The Soaltee Enterprises owns 40% of Soaltee Hotel Ltd. and majority in Himalayan Goodricke (P) Ltd. The latter owns a tea garden in Eastern Nepal.

The fact that almost all of the Soaltee Group businesses are under joint venture with foreign investors may help the Nepali economy that is hungry for technology and investment. Foreigners may reasonably be sure that the facilities enjoyed by king’s businesses will be available to their businesses as well.

As far as the question of taxing the king’s income goes, there seems to be not much problem as the law may apply to the dividend income and that can be easily made tax-free for the king. The corporate profit can be taxed because such profits are of a corporate citizen. Making noise about king’s business would force him to take his investment abroad, in which case the loser will be the home economy, point out some analysts.

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