Acting upon complaints about alleged unfair ways used in screening the applications, the CIAA had initiated investigation by seizing concerned files from NEPSE two months ago.
“Initial investigations show that NEPSE officials have misinterpreted the guidelines on broker selection and recommendations and used discretionary powers during the short-listing process of applicants,” an investigation officer at the CIAA told myrepublica.com.
As per the guidelines the applicants should be at least have bachelor´s degree with two years of working experience in an organization.
“But, the guidelines lack clear definition of the ‘organization’,” the officer added.
The official also said complaints have been received regarding the applications from the persons who are holding public posts, exercise of discretionary power in granting marks to the applicants, equal treatment for the applicant companies that deposited the capital in the bank and those that show capital in paper audited by registered auditors.
“We are also probing that an incumbent employee of Nepal Bank Ltd -- the state-owned commercial bank, has applied for stock broker license, which is considered lucrative,” revealed the official.
“Some public companies have submitted only auditor’s report to show their capital while some have shown bank statements. But NEPSE officials seem to have given equal treatment to both the cases,” said the official.
In connection with the probe, the CIAA two months ago had seized files of 39 companies securing more than 70 marks out of full mark of 75 during selection process of NEPSE.
Of the total firms under investigation five — Fortune Bulls Securities, Nasa Securities, Saiseli Securities, Sundara Securities and Ace Securities — were registered as public limited companies.
The investigation was initiated after complaints were received against the use of discretionary powers by NEPSE officials.
NEPSE had invited applications for 27 new stock brokers after complaints that the existing 23 brokers encouraged monopoly in the burgeoning secondary market in the country.
A total of 316 firms had applied for stock broker licenses.
The source also said the CIAA summoned NEPSE officials in this connection last week to make further inquiry about the screening process.
“We are trying to complete the investigation within one month,” the source added. As per the existing provision, CIAA should conclude investigation within three months of registration of complaints.
prabhakar@myrepublica.com
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