In his clarification furnished recently to the Securities Board of Nepal (Sebon), Pradhan claimed that the fund´s paid-up capital of Rs 246.8 million was collected from its 165 promoters.[break]
“I have also taken loans worth Rs 290 million from different banks and financial institutions. I am ready to refund 100 times more if it is proved that our fund mobilized money from general public in the name of mutual fund,” Pradhan said in his clarification.
He also claimed that the firm earned an accumulated profit of Rs 20 million over the past three years.
Stating that the firm was found illegally collecting money from general public in the name of mutual fund, Sebon had asked it to furnish clarification within 15 days.
Going by the existing laws, only the subsidiary of banks and financial institutions with paid-up capital of Rs 1 billion can operate mutual funds.
Sebon had found RIF of collecting money from the general people, promising annual interest return of 10 percent, to invest on shares.
Interestingly, the company is headed by Nirmal Pradhan, who is one of the largest investors in the country´s capital market.
Sebon -- the capital market regulator -- came to know about the unauthorized operation of the company when it approached the board, seeking permission for initial public offering (IPO). The company had sought permission to issue 123.2 million units of ordinary shares.
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