House panel grills PM Dahal over Axiata’s controversial Ncell deal

Published On: December 19, 2023 05:13 PM NPT By: Republica | @RepublicaNepal

KATHMANDU, Dec 19: The State Affairs and Good Governance Committee under the House of Representatives (HoR) has issued six instructions regarding the Ncell purchase and sale issue.

The instructions were issued after the parliamentary panel on Tuesday held discussions with Prime Minister Pushpa Kamal Dahal. Addressing the meeting, Prime Minister Dahal said that the deal itself was not natural and that this could be a part of a well-designed plan not to let the Ncell come to the government’s ownership.

The 25-year license period of Ncell, which was granted a license on September 1, 2004, will expire in September 2029. According to the existing Telecommunication Act 2053, Ncell would come under the ownership of the Government of Nepal after the expiry of the license period.

Prime Minister Dahal also refuted allegations that the government or those belonging to ruling parties were directly involved in the suspicious deal.

This development comes in the wake of the Inland Revenue Department (IRD) starting an investigation over Axiata's exit from Ncell on suspicion of possible evasion of taxes by the company.

The issue came to the limelight after Axiata Group sold its 80 percent of stakes in Ncell for a mere US$ 50 million (Rs 6.5 billion) to Spectrlite UK. The Malaysian telecommunications and digital conglomerate had acquired the controlling stakes in Ncell in 2016 following the purchase of Reynolds Holding for US$ 1.365 billion (Rs 143 billion).

According to an IRD official, the company has not officially informed the tax offices regarding its exit from the Nepali market.

Based on the report from the Study and Investigation Committee concerning the purchase and sale of Ncell shares, the parliamentary committee has instructed the government to collect the taxes owed or to be paid by Ncell to the state.

The first instruction reads, "Based on the report of the 'Study and Investigation Committee on Ncell Share Purchase and Sale – 2080' formed by the Government of Nepal, instructions have been given to the Government of Nepal, the Office of the Prime Minister and the Council of Ministers, the Ministry of Finance, and the Ministry of Industry, Commerce, and Supplies to recover the tax/non-tax amount due to the state from Ncell according to the prevailing law."

The parliamentary panel has also directed the government not to grant approval or consent for any share transactions until the inquiry committee submits its report. Additionally, the government has been advised to promptly amend the Telecommunication Act and Regulations and implement them as expeditiously as possible.

Addressing the parliamentary committee meeting, Prime Minister Dahal expressed commitment to take firm action against anyone involved in the controversial Ncell deal as per the existing laws and other legislations in the country. “We will not consider acquaintances or relatives [involved in the deal]. The most important thing is the interest of the people and the country,” he said.

On the occasion, Prime Minister Dahal said he was serious about the Ncell’s controversial deal and he had directed to form a probe committee to investigate the deal upon his return from the UAE after participating in the COP-28.

“The directive was issued as the government has also not taken the deal naturally. This is not simple. Since the deal does not look natural, we had to issue the directives [to form a probe panel],” said the prime minister. “The probe committee was formed as the government is convinced that there is foul play involved in it.”

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

The members of the committee are Secretary Fanindra Gautam, Joint Secretary of the Ministry of Finance Ritesh Kumar Shakya, Joint Secretary at the Ministry of Communications and Information Technology Babu Ram Bhandari and President of ICAN Sujan Kumar Kafle.The probe committee has been entrusted with the responsibility to study and investigate the share purchase and sale of Ncell and submit a report by January 7, 2024.