Sebon to seek clarification
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KATHMANDU, Feb 16: In a clear violation of disclosure requirement, three commercial banks have not published their quarterly financial report even after 32 days of the end of the second quarter.
Janata Bank Ltd, Rastriya Banijya Bank Ltd (RBBL) and NCC Bank Ltd have not yet published financial results for the second quarter of Fiscal Year 2015/16 though the securities law requires them to publish their financial results in newspapers within 30 days of the quarter end.
Machhapuchhre Bank Ltd, Laxmi Bank Ltd, NMB Bank Ltd and Kumari Bank Ltd published their reports two days after the regulatory deadline. These four banks published their quarterly reports only on Monday while the last deadline to publish their reports was last Friday.Securities Registration and Issue Regulations 2008 requires listed companies to prepare and submit their quarterly report within a month of the end of each quarterly period. Such reports have to be published in national dailies as well.
However, Securities Board of Nepal (Sebon), the capital market regulator, seems to be lenient toward listed companies that do not make disclosure in time.
"Failure to publish quarterly results in time is a clear breach of the regulatory requirement. Sebon will seek clarification from companies that violate such requirement," Niraj Giri, spokesperson of Sebon, told Republica.
Replying to a query on whether the capital market regulator would take any action for such failure, Giri said that they will take needful action, including imposition of fine, based on the 'gravity' of the violation of the rule. "First, we seek clarification from such companies. Based on their clarification, we decide whether to take further action against them," he said. "Imposing fine is the action we take against such companies. But that is in extreme case."
While RBBL does not fall under the regulatory ambit of Sebon, delay of other two banks to publish their quarterly results is attributed to their merger process.
"Though quarterly reports do not make significant impact on the stock market, it is the right of the investors to get information on time. Delay of any company to make disclosure on time may spoil the image of the company among the investors," Bachhu Ram Rimal, general secretary of Nepal Investors Forum, told Republica.
Most of the commercial banks have already published their reports of the second quarter. Reports show that banks have logged impressive profit over the first half of the current fiscal year. Recent problems like Tarai unrest, India blockade and liquidity surplus seemed to have made little impact on the balance sheet of the banks.
Many analysts attribute the impressive performance of BFIs in the second quarter to the relaxations offered by Nepal Rastra Bank (NRB) on loan loss provisioning as well as on restructuring and rescheduling of non-performing loans of borrowers battered by the 'unfavorable circumstances'.
