May 17: A few companies have decided to knock the door of the court after the Securities Board of Nepal (Sebon) rejected their proposals to start commodities exchanges. Sebon rejected the proposals of five companies on April 24 citing the lack of sufficient documents and has sought new proposals.
The companies have decided to challenge the decision of Sebon at the court, terming it illegal.
The five companies whose proposals were rejected include Commodity Futures Exchange Limited, Nepal Commodity, Nepal Mercantile, Risal Commodity and Multi Derivative Exchange.
Sebon rejected the proposals and issued a notice the next day asking the companies to submit fresh proposals within two months.
Sebon Spokesperson Niraj Giri said that the companyies’ proposals were rejected as they lacked documents as per the requirements of the Commodity Exchange Act 2074. He further said that only two new companies will get the approval for the time being.
Meanwhile, the companies have said that Sebon’s move to reject the proposals, which were tabled more than two years ago, all of a sudden, is an illegal act.
According to the law, Sebon should have given the companies the permission to start commodities exchanges within 120 days if it was convinced that the business would be beneficial for the public at large.
“Sebon should have informed us within 120 days whether it would approve our proposals. Since it did not do so, the decision is illegal,” argued one of the companies.