KATHMANDU, August 1: The Employees Union of the Securities Board of Nepal (Sebon) has urged the government authorities concerned to carry out an investigation into the controversial case of Sebon Chairman Bhisma Raj Dhungana’s alleged involvement in insider trading.
Issuing a press statement on Sunday, the trade union of the regulatory body has urged the government to take severe action against those who will be found guilty in the scam. “The board chairman seems to lack morality and integrity, raising a big question over the dignity of the whole institution that is responsible to safeguard the interests of around 3.8 million investors and the stock exchange market, the market capitalization of which is similar to the country’s GDP,” reads the press release.
A few days ago, a media outlet published news on Sebon Chairman Bhisma Raj Dhungana, accusing him of being involved in insider trading for vested interests. Dhungana has been accused of purchasing 11,992 units of general shares of Sarbottam Cement, a company that is in the process to issue primary shares to the public through book building process.
Sarbottam Cement is looking to receive the board’s approval to issue its six million units of primary shares to the public. However, Dhungana has been accused of purchasing the shares before the company goes public. He was found to have purchased the shares in the name of his daughter who lives abroad. Sebon’s rules bar its officials from receiving any undue benefits by abuse of authority.
In this regard, the Ministry of Finance a few days ago asked Sebon for a clarification over the board’s officials’ alliance to acquire shares of the cement company.
It is not the first time that Dhungana has fallen into a controversy while fulfilling his duties as the chairman of the regulatory body. Dhungana has been blamed for deliberately delaying the process of issuing new stock brokerage licenses.
In mid-June of the last fiscal year, Sebon published the names of 51 listed companies, which were deemed risky based on a few criteria. Although Dhungana gave clarification that he intended to caution mainly the small investors to invest only by weighing up all investment related risks, he was criticized on the ground that the move further made the investors suffer at a time when the secondary market was going in a bullish trend.
Similarly, Dhungana has also been accused of heavily raising his own pay and perks as the board’s chairman, taking undue advantage through a favor of the then Finance Minister Yubaraj Khatiwada.