KATHMANDU, Sept 26: The Securities Board of Nepal (Sebon) has tightened the noose on hydropower companies regarding issuance of their primary share and trading of promoters’ shares.
Enforcing 10-point guidelines for the hydropower producers, the Sebon has imposed stern measures against investors in the segment. With the Sebon’s guideline in place, hydropower companies now have to complete at least 65 percent of their construction work in order to float their initial public offerings. Likewise, the hydropower companies looking to issue primary shares should also have their internal rate of returns of 12 percent or more.
Similarly, the investors of the promoters’ shares will also face stern measures imposed by the Sebon. In the new rule, promoters of such companies can sell their shares after the end of the lock-in period only if the companies have started producing electricity.
According to the Sebon, it has come into action after receiving growing complaints against the hydropower companies on their share issues. Many hydropower producers have been found dilly dallying in electricity production after gathering money from the general people through issuance of shares.