Nepal has launched an inquiry into the alleged involvement of Securities Board of Nepal Chairperson Bhisma Raj Dhungana and Nepal Stock Exchange Chief Executive Officer Chandra Singh Saud in insider trading
Nepal has launched an inquiry into the alleged involvement of Securities Board of Nepal Chairperson Bhisma Raj Dhungana and Nepal Stock Exchange Chief Executive Officer Chandra Singh Saud in insider trading. Relatives of both men had bought shares in a company that was going for an initial public offering (IPO). Dhungana’s daughter Rebika Dhungana and Saud’s wife Sushila Kumari Bohora each had purchased 11,911 shares of Sarbottam Cement, which was going for its IPO debut worth $50,000 under book building mechanism.
Prem Kumar Rai, the chief commissioner of the Commission for Investigation of Abuse of Authority, the anti-corruption watchdog, confirmed that they have sought the relevant documents from the finance ministry. He didn’t elaborate more on the matter.
The commission’s move comes a few days after the Finance Ministry sought clarifications from Dhungana and Saud on the issue. The duo had been earlier asked to submit their response by the ministry.
Sarbottam Cement, which is going for the IPO, had earlier sought the board’s assistance in facilitating the launching IPO. The relatives seemed to have taken the advantage of the insider information while the board and the chief of the stock exchange were assisting the company with the process.
On Sunday, the Employee Union of Securities Board of Nepal demanded legal action against the stock regulator’s chairperson, Dhungana, after he was accused of insider trading although his job is to check such malpractices.
Releasing a statement, the union said their involvement of Dhungana in insider trading suggested that his act amounted to “utmost moral hazard” from the perspective of honesty, legal provisions, and code of conduct of the board.