The interim order will be effective until May 28, when the court has summoned NT to participate in a discussion on whether to give continuity to the order till the case is finalized.
Following the court´s verdict, Nepal Telecom (NT) has stopped the dividend distribution process until May 11, when the court will revise its decision.
NT had started giving away the profit on shares to its shareholders from Tuesday morning. And till the time that the interim order was issued, many people who had bought the company´s shares had already collected the dividends.
But the stay order has been heeded. "Although the verdict came late, we have stopped the process of distributing the cash dividend," an official of NT told myrepublica.com, requesting anonymity, soon after the stay order was issued.
NT, the country´s largest telecom company, had some three weeks ago announced that it would give away Rs 25 on each of its shares, from a net profit of Rs 7.94 billion generated by the company in the last fiscal year.
However, public shareholders are demanding that they be given dividends based on the profit generated by NT since the time it was converted into a public company, which was some four years ago. The public shareholders had made this demand on the grounds that they had to invest huge amounts to buy the company´s shares last year.
Last year, when NT had floated its shares to the public, it had put a price tag of Rs 600 on each of its shares. Unlike other companies that issue each share with a face value of Rs 100, NT had added a premium of Rs 500 to each of its shares; NT did this because it had been operating on profit for three consecutive years.
Assuming NT´s shares to be blue chips, general citizens had paid up to Rs 2,500 to lay their hands on a single share. But now, a year later, the value of NT´s share has come down to less than Rs 530, distressing many who had invested considerable amounts on what they now call a "worthless investment tool."
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