Patan High Court gives continuity to its previous interim order in Ncell shares trading

Published On: January 24, 2024 09:30 AM NPT By: Republica | @RepublicaNepal

The short-term interim order on December 7 asks Ncell to halt process of shares trading

KATHMANDU, Jan 24: The High Court, Patan, has given continuity to the short-term interim order that it had previously issued in the case related to tax evasion in the transaction of shares of Ncell, a private sector telecommunication company of Nepal.

A joint bench of judges Shaligram Koirala and Shyam Kumar Bhattarai on Monday decided to carry on with its previous interim order. On December 7, the bench of Judge Purushottam Prasad Dhakal of the High Court had issued the short-term interim order for not taking forward the process of shares transfer of Ncell. Stating that it is mandatory for the company to take approval of the regulator, the High Court had ordered Ncell to halt the shares trading.

Axiata Group, which acquired Ncell in 2016, announced its exit from the company recently. Axiata had bought 80 percent of Reynolds Holding's shares in Ncell for Rs 143 billion. After seven years, the selling of the same shares for just 4.65 percent of the purchase price, i.e. 95.35 percent less than the sale price, has raised suspicion of ulterior motives to secure undue benefits.

In response to a case registered against Ncell's current investor Axiata and the owner and manager of Sunivera Capital Ventures, which is considered to be a local partner, the Patan High Court had issued a short-term order against the deal. The writ petitioner claimed that the deal involved possible evasion of taxes that the company could owe to the government for the transaction of its shares.

Shares in Axiata Reynolds Holdings were acquired by Spectrlite UK owned by Satish Lal Acharya, a Nepali-origin shareholder. Ncell asserts that Spectrlite UK emerged as the top bidder among several competitors.

The government has formed a high level probe committee to investigate the Axiata-Ncell tax evasion case. The probe committee is led by Former Auditor General Tanka Mani Sharma.

Considering its previous interim order as its precedence, the High Court also asked both the sides not to stall the set hearing dates.