Voting for president, vice president completes; 16 CA

Voting for Nepal's first president and vice president has completed, and counting of votes is underway at the Constituent Assembly (CA) Secretariat in Naya Baneshwor.
A member of the Constituent Assembly (CA) casts vote to elect the first president of republic Nepal at the CA building, on Saturday, July 19 08. nepalnews.com/rh
A member of the Constituent Assembly (CA) casts vote to elect the first president of ...

The voting, which officially began at 11:00 am, concluded half an hour behind schedule, at around 2:30 pm. Out of the 594 CA members registered for voting, 578 CA members cast their votes to elect the president and vice president.

Four minor parties - Nepal Workers and Peasants Party, Rastriya Prajatantra Party (Nepal), Rastriya Janamorcha and CPN (Unified) - boycotted the election.

The results of the election will be presented to CA chairperson at 5:00 pm for announcement at the CA meeting today.

Seven candidates - three for president and four for vice president - are in the fray, but the UML and Madhesi Janadhikar Forum (MJF) had agreed, earlier today, to back Nepali Congress presidential candidate Dr Ram Baran Yadav
while NC and UML agreed to support the MJF candidate for vice-president, Paramananda Jha.

Imprudent loans cost provident fund Rs 210m

Creditworthiness and good collateral are two key considerations for a lending institution before extending any loan to a client.
But the Employees Provident Fund (EPF), flouting both these considerations, issued loans totalling Rs 100 million in 2001 to Nawalparasi-based Silver Fiber Textile Mills (SFTM). Result: SFTM hasn't repaid a single rupee to EPF though the loan repayment period expired this year. The repayment amount has now swollen to Rs 210 million and SFTM is no longer in operation.

This has raised questions whether the client had malign influence on decision makers at EPF and has drawn the attention of both the employees' union there and the Commission for Investigation of Abuse of Authority (CIAA).

According to documents obtained by the Post, the EPF Board on May 24, 2001 decided to provide a loan amount of Rs 100 million to SFTM in two phases (Rs 55 million as a short term loan and Rs 45 million as long term) under consortium financing with Nepal Bangladesh Bank (NB Bank). The Board had agreed to accept the mill's fixed assets as collateral for the short-term loan of Rs 45 million, but had asked management to secure additional collateral for the long-term loan of 55 million

The management, however, released Rs 100 million without securing additional collateral. Then Administrator Rajeshraj Rajkarnikar, current Administrator Sashi Bikram Rana, and Senior Deputy Manager Laxmi Prasad Shrestha, as members of the management team, overrode the Board decision and released the loan without seeking additional collateral.

When asked why management release the loan without securing collateral, Rana said, "We released it on personal trust." He also said that the clients had agreed to submit additional collateral in six months. "But they failed to do so." However, he argued that the owners of SFTM, Thakur Pratap Thapa and Jeewan Bista, have assured repayment of the loan. But he doesn't know when.

A senior official at NB Bank says EPF shouldn't have released the loan under personal trust. "NB Bank had warned EPF about this during its consortium meeting," the official says. He also said the bank is preparing to blacklist SFTM for not clearing the loan.

Deep Basnet, current president of the EPF Board, says EPF management can't violate a decision of the Board. "The management can't release loans without securing sufficient collateral," Basnet said, adding, "If found guilty, the management will be subjected to action." He, however, said he was not familiar with the issue.

Besides the collateral issue there is also a question of how genuine the client was and whether it demonstrated necessary creditworthiness. The fact that SFTM had failed to repay Rs 67 million to Nepal Bank Limited (NBL) and was seeking the loan partly to repay NBL, leaves a big question mark over creditworthiness.

EPF has done an evaluation of the fixed assets of SFTM, which was taken as collateral for the short term loan of Rs 45 million, to ascertain how much money it can recover through the collateral. The mill's fixed assets mortgaged as collateral for the short term loan have been valued at a meager Rs 13 million.

EPF also seized 31 ropani of land belonging to SFTM after the case ended up at the CIAA. But the land is worth only Rs 500,000.

Lila Adhikari, president of the EPF union, said it is a serious financial scam and demanded investigations. In the meantime, the CIAA is also investigating the case.


Source: www.ekantipur.com

Rs 4b worth of securities to hit market

More and more companies are going public and issuing rights shares and corporate bonds - good news for investors and the development of the country's capital market.
The data of the Securities Board of Nepal (SEBON) shows that 22 institutions are issuing securities worth Rs 4.31 billion during the current fiscal year, which is an enormous increase from the previous fiscal year.

During fiscal 2006/07, SEBON had granted permission to varied companies to issue securities worth Rs 2.75 billion.

This year, the board has given the go-ahead to seven companies to make an initial public offering (IPO) to raise Rs 274 million.

Likewise, 14 companies have received permission to issue rights shares worth Rs 2.53 billion during the period. A single company, the Nepal Electricity Authority, has been granted permission to issue power bonds in the value of Rs 1.50 billion.

“The rise shows the growing confidence of institutions and people towards the stock market,” said a SEBON official. Following the central bank's decision to increase the paid-up capital of financial institutions by 2011, they have gone on a share issuing binge to raise money. Banks are required to expand their capital to Rs 2 billion after three years. “Almost all the permits to issue rights shares have gone to financial institutions,” said the official.

With the growing number of companies issuing rights shares, a market should be created by allowing investors to sell their rights shares, said Bijaya KC, dean of the South Asian Institute of Management. Despite the rise in the issue of rights shares, the market continues to be dominated by financial institutions.

KC said that if an investment environment is not created, other companies will not have a chance to expand. “So they do not feel the need to go public to raise funds,” he said.

Source: Kantipur

Daylight robbery in Capital; Rs 40 lakh looted

In the fourth incident of daylight robbery this month, six armed persons today looted Rs 4 million in cash from a security guard of a finance company at Ranjana Galli, Newroad, in Kathmandu.
Raju Tamang, along with his colleague, Bindu Joshi, was returning to Share Market and Finance Limited at Ranjana Galli after withdrawing the cash from New Road branch of Nepal Investment Bank when two motorcycles blocked their way and made away with the cash after injuring Tamang.
“The armed persons hit him in the head and right leg with khukuris. When he fell, they snatched the bag containing the cash from Tamang,” Joshi said. According to her, one of them pointed pistol at her when she tried to protest. Tamang has been admitted to Bir Hospital. The incident took place around around 12:30 pm.
A police constable who saw six persons assaulting a man in front of the cinema hall, said, “I thought they were fighting. When I tried to catch one of them, he tried to hit me in the face but I ducked. They went towards Pyukha. I couldn’t catch them.”
Inspector Anupam Rana at the Jana Sewa Police Station said a patrolling police encountered the armed group when they were running. “When they saw the policemen, they threw their khukuris and jackets,” he said. “However, the team had no knowledge about the robbery at Ranjana Galli,” he added.
“On the spot, an assistant sub-inspector pointed a pistol at them but a boy and a girl were in between,” SP Sarbendra Khanal at the Metropolitan Police Range, Kathamndu, said.
Rana said they came to know about the robbery only after Tamang was admitted to Bir Hospital.
On January 21, cash worth Rs 1,911,856 was looted from Sanjay Kumar Jha, a staffer of Hulas Remittance, in front of Teku Branch of the Everest Bank after he withdrew the money from the bank.
On January 13, Rs 5 lakh was looted from Banshiram Parikh, cashier of TM Dugar, at the counter of Bank of Kathmandu.
A group of cheats had looted Rs 1.6 million from a customer of the Standard Chartered Bank at New Baneshwor on January 6.

Source: The Himalayan Times