Lawmakers express woes on possible impacts on FDI inflow due to Axiata-Ncell issue

Published On: December 6, 2023 08:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Dec 6: Analysts and political leaders have expressed concern over the Axiata’s controversial exit from Ncell stating that it might seriously affect the inflow of foreign direct investment to the country in the future.

Rastriya Swatantra Party (RSP) has demanded the authorities concerned to carry out an in-depth study about the controversial deal of Axiata. In an appeal filed at the parliamentary Education, Health and Technology Committee on Monday, Lawmaker of the RSP Sumana Shrestha said that the suspicious agreement between Axiata and Ncell for the next six years could evade capital gains tax from 25 percent to five percent. 

“The deal could fade the country’s image in the international market, while it might also discourage the foreign direct investment in the future.”

Axiata Group, which partnered with Ncell in 2016, announced its exit from the company last week. Axiata bought 80 percent shares of Ncell owned by Reynolds Holding for Rs 143 billion, while it is selling its stakes for only Rs 6.65 billion.

Ncell’s operating license will expire in August-end 2029.  According to the legal provision, the ownership of the company will be automatically transferred to the government after the expiration of the operating license.

Senior leader of Nepali Congress Shekhar Koirala blamed the alliance of politicians, bureaucrats and businesspersons for the alleged deal. “It is a well-planned plot to take undue benefits through bypassing the government,” said Koirala at a program on Tuesday.

The Public Accounts Committee (PAC) of the House of Representatives had written a letter to the Nepal Telecommunication Authority, the Company Registrar's Office and Inland Revenue Department, suspecting tax evasion in the sale of Ncell shares. The parliamentary committee will be convening a meeting on Wednesday to study in detail on how the sale of Ncell shares might impact service delivery, revenue, and income tax, as well as whether any laws were violated during the transfer of rights.

All Nepal National Free Students Union (ANNFSU) on Tuesday staged a protest saying that there was manipulation in the purchase and sale of Ncell's shares. The protestors carried placards with slogans such as ‘No Tax, No SIM’, ‘Reject Ncell’, ‘Down with a coalition government that feeds the mafia’ and ‘Tax cheating is a crime,’ among others.

Meanwhile, Ncell replied to the Nepal Telecommunications Authority (NTA) on its shares transfer. The NTA on Friday asked the private sector telecom company for clarification on not informing the regulator on the matter. The NTA Chairman Purushottam Khanal said they have started assessment over the reply sent by Ncell.

PM Dahal talks with top political issues on Axiata-Ncell shares transfer issue

Prime Minister Pushpa Kamal Dahal on Tuesday discussed with the leaders of the ruling political parties regarding the non-transparent sale of the Ncell shares by Axiata Group. Prime Minister Dahal talked with the top leaders including Nepali Congress President Sher Bahadur Deuba and CPN Socialist Chairman Madhav Kumar Nepal, among others, in order to make a common opinion regarding the big financial scam of the telecom company.  


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