Business News

Former bureaucrat and incumbent president of Nepal-USA Chamber of Commerce and Industry (NUSACCI), Narendra Kumar Basnyat, has assumed the position of the Executive Chairman of Himalayan Distillery (P) Ltd. (HD), thus marking the beginning of a new chapter in the history of Nepal's family-owned companies.

Coming as he does from outside the family that owns almost all of the shares in the company, Basnyat has become the first outsider to assume the coveted position of a chairman in any of the family-owned companies in Nepal.

Though Basnyat is said to have acquired some equity in the company he is still a minority shareholder, according to company sources. Meanwhile, the promoter of the company, Vijaya Kumar Shah, says, he has already transferred all his shares to his family-members together with inviting Basnyat to lead the company. Thus Shah is readying for retirement and he also says that the company is in preparation to float the HD shares to the general public.

Established as a sister concern of Jawalakhel Distillery (JD), one of the oldest modern distillery companies, HD is to inherit the business of JD which in turn is slated to be closed down. It has been only about seven months that HD had launched Royal Stag brand of whiskey in technical and marketing collaboration with Seagrams, one of the largest producers of Scotch whiskey in the world.

(See also the inner-view column in this issue)

Appointing five hoteliers to theNepal tourism Board (NTB) from the private sector after good five months of the positions remaining vacant, HMG has invited strong criticisms from rest of the components of country's tourism industry.

The newly appointed NTB members include Shyam Bahadur Pandey, Mrs. Ambica Shrestha, Yogendra Shakya, Kali Bahadur Adhikari and Bishwa Shankar Palikhe.

Travel agents have been more vociforous in their criticism to the selection, with Trekking Agents Association of Nepal (TAAN) issuing strongly worded official press release denouncing the government's selection.

The controversy seems to be rooted on the Tourism Service Charge (TSC) which is the main source to finance the NTB budget. As most of TSC is raised by hotels, they have been constantly pressing for majority representation in the Board. HMG has obliged, but creating other controversies.

Education & Book Fair

Starting May 4, 2001, Nepal Education & Book Fair-2001 is being held at Bharikuti Mandap Exhibition Hall bringing together career conscious people, students, teachers, education policy makers, educational institutes, publishing houses etc. under the same roof.

According to the organisers of the Fair, Global Exposition & Management Services (P) Ltd. (GEMS), the education and career section of the Fair will conclude on May 7, while the Book Fair will continue till May 12.

The nine-day event is expected to draw fifty thousand visitors, say the organisers. Beside the show, the event will also feature talk programs, workshops and special educational programs such as quiz contest and on-the-spot painting contest.

This is the fifth time that this annual event is being held.

Yet Another Apex Chamber

Indicating dissatisfaction over the way FNCCI, the existing apex association of the country's business community, is functioning, the bi-national chambers in the country are about to form their own confederation.

Though it is said that the new confederation is to help FNCCI, leaders of the new confederation have been critical of FNCCI for outdated style of ineffective functioning and not giving due importance to the business issues of binational nature.

Leader of the task force formed for setting up the new confederation, Narendra Kumar Basnyat (who is also the president of Nepal-USA Chamber of commerce and Industry- NUSACCI) says, though in theory FNCCI is called the apex body of the entire business community of the country, it is more dominated by district chambers. Though he also says that binational chambers are not trying to create another body parallel to FNCCI, he does not hesitate to add that if FNCCI fails to serve the purpose of binational chambers, "we must find our own way."

In the last AGM of FNCCI, the binational chambers had demanded amendment in FNCCI constitution to allow ordinary member's status to binational chambers. "But that has been totally rejected by district and municipality chambers," complains basnyat. Such local chambers, exercise 50% voting rights in FNCCI.

Another significance of the new development is because it comes soon after the US-India joint venture company in Nepal, Kodak Nepal Ltd., was rejected the certificate of origin by FNCCI. The dispute has now reached the supreme court in the form of a writ petition by Kodak Nepal making FNCCI one of the respondents to the petition. Such certification is a must for a company for concersional access to the Indian market vied by MNCS world over.

"FNCCI has been running as a party organisation rather than as a professional organisation", Basnyat complains and promises, "we'll concentrate more on macro-economic issues rather than on the nitty-gritties".

Mountain Air Completes First Year

Among the new brigade airline operators, Mountain Air, market watchers view, has been able to establish a firm foothold in the Nepali skies.

The airline, which only days ago celebrated its first anniversary, credits its good performance to its sound marketing. Besides offering free flights to children bellow two years of age Mountain Air also introduced the frequent flyer program under which travel for the 20^th time within the year would quality a traveler for a free ticket to any sector other than mountain flight.

In its first year of operation, Mountain Air claims that it has carried a total of 65,400 passengers out of which 19269 were foreigners liquorice, according to the airline, it has ferried 1479 Nepali and 37 foreign children free of cost in its inaugural year. the company also informs that its two 1900c Beech craft fly a daily schedule of 8 mountain flights.

Governor, Now Lawfully

Winning a court battle that stretched over six months, Dr. Tilak Rawal has resumed office as the Governor of Nepal Rstra Banks (NRB), the position from which he was unceremoniously removed in August last year.

Following a ruling by the supreme court in March this year, Dipendra Purush Dhakal, whom Dr Rawal now replaces, had stopped attending office, thus leaving the Governor's position vacant for about two weeks.

Excellence Award Un-conferred

The first FNCCI-National Excellence Award found no winners.

At a function organised to mark the Industry Commerce Day (on Apirl 10), the apex body of the business community made known that business house or firm was able to meet the criteria set by the federation. However, three big and two small scale enterprises respectively Nepal Lever, Surya Tabacco Company, Gorkha Brewery, Asian Paints and Pashupati paints, were recognised with certificates of commendation.

While the decision not to hand over the award to any one this year met with mixed reactions, FNCCI, view experts, has made it clear that the different international awards, like ISO certification, does not essentially qualify any organisation in terms of quality.

(For information on criteria and other details of the award, refer Business Age vol 3 No 3)

Securities Regulations Revised

While the gloom following the recent crash in Nepal stock Exchange is persisting, securities Board, the regulator of securities market in the country, has brought out a new set of directives for the new issue of securities and listing them in the stock exchange.

To be effective from April 14, 2001 with the beginning of the new year the Nepali Calendar, the new directory provides that a company will not be allowed for public issue without a proven track record of being in operation for at least one year. However, this restriction is waived in case of financial services companies and in those subsidiaries that are promoted by domestic or foreign companies which have a track record of running profitably for two consecutive years.

Among other major additional provisions in the directives is an attempt to make the consultants professionally responsible for the financial forecast made in the prospectus issued inviting subscription from the general public. Similarly, the company directors also are made responsible for such projections.

The new directives also try to discourage multiple application from a single applicant for the newly issued scrips.

Meanwhile, the Board has also brought out a guide book to educate investors about how to make judicious investment in the stock market.

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