Appointment of SEBON Chairman Mired in Controversy

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Appointment of SEBON Chairman Mired in Controversy


KATHMANDU: The process of appointing the chairman of the Securities Board of Nepal (SEBON) has been mired in controversy, with allegations that the government is attempting to appoint the chairman in collusion with businessmen and political leaders.

Three out of five shortlisted candidates for the position of SEBON chairman did not participate in the scheduled presentation of their business plans and interviews on Wednesday. This marked the second instance of their absence.

According to the Securities Act, 2063, at least three qualified individuals must be recommended for the position. Since only two candidates participated in the presentation and interview, legal complications have arisen, making it difficult to proceed under the current circumstances.

During the initial call, only two of the five candidates—Santosh Narayan Shrestha and Muktinath Shrestha—attended the interview on June 16. With three candidates absent, a re-interview was scheduled for the remaining candidates on Wednesday, June 19. However, none of the three candidates showed up for the re-interview.

Given this situation, the recommendation committee responsible for the appointment decided to seek a legal opinion from the Office of the Attorney General. A committee member informed New Business Age that the Securities Act, 2063, lacks clear guidelines on what to do if a candidate for the post of chairman does not participate in the presentation and interview. Similarly, there are no specific provisions in the appointment procedure established by the recommendation committee. Amidst this confusion, the committee sought the Attorney General's opinion.

"Based on the legal opinion from the Attorney General's office, the committee will make the necessary decisions," said a committee member. The three-member recommendation committee is chaired by Meen Bahadur Shrestha, vice chair of the National Planning Commission.

The three candidates, believed to be close to the Maoists, were absent from the presentation and interview following an agreement between Prime Minister Pushpa Kamal Dahal and the chairman of the ruling CPN (UML), KP Sharma Oli, to appoint Santosh Narayan Shrestha as SEBON chairman. Sources have indicated that Oli has been pressuring Shrestha’s appointment.

One of the absent candidates told New Business Age that he did not attend the interview because he did not want to participate in a process designed to appoint someone else as chairman under the guise of competition. Asserting that his decision to boycott the interview was not influenced by any business house or political leader, he said, "I did not voluntarily participate because the interview was set up to show my abilities were weaker than others."

He added that he would reapply in a future environment that promotes fair competition. According to sources, two business groups are politically lobbying to get their preferred candidate appointed as chairman, aiming to secure a new stock exchange license.

Three companies have applied for the new stock exchange license: Himalayan Stock Exchange, National Stock Exchange of Nepal, and Annapurna Stock Exchange Limited. One eligible company will be granted the new stock exchange license.

The promoters of the Himalayan Stock Exchange include Shankar Group and Deepak Bhatt's Infinity Holdings, along with other major business houses. Those promoting the National Stock Exchange include former presidents of the Non-Resident Nepali Association, Upendra Mahato and Jiva Lamichhane, along with Agni and Kedia Group. Rameshwar Thapa, the owner of Annapurna Media, has applied for the Annapurna Stock Exchange.

There are speculations that the directors of the Himalayan Stock Exchange want Santosh Narayan Shrestha as SEBON chairman and have sought the support of UML Chairman Oli. Sources suggest that the directors of the National Stock Exchange are seeking cooperation with the Maoist leadership. The appointment process for the chairman has been stalled amidst this controversy.

The recommendation committee collected 19 applications for the post of SEBON chairman between February 28 and March 13, shortlisting five qualified candidates on March 25. The Ministry of Finance and SEBON sources said the interview was scheduled for April 7 but was halted for two months at the instruction of Finance Minister Barshman Pun.

This trend of complications in appointing SEBON chairman is not new. A candidate who had applied several times in the past, speaking on condition of anonymity, said he did not apply this time due to the perceived necessity of substantial financial backing. He stated, "I did not apply to become chairman because I could not afford to spend millions on the investments of major business houses. I was asked to pay Rs 50 million. Open money bargaining is done in the name of open competition."

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