Nepse rejects listing application

Says company is in red since beginning, prospectus misleading To protect the investors, Nepal Stock Exchange (Nepse), the sole secondary market, today refused to list Merchant Finance Company Ltds shares for trading.Nepse, propelled by the financial companies, smelled rat after it found the Merchant Finance Companys prospectus misleading and accounts in red since it started operations in 2052 BS.The company has been continuously in loss since it started itsoperation, Rewat Bahadur Karki, general manager at the Nepse said, adding that the prospectus of the company is also misleading.After the listing, shares of the company is most likely to go sky high as other financial institutions.Once, its shares are listed, the investors, who buy it thinking of making money might find themselves being cheated, he added.Its not the first time for Merchant Finance Company, promoted by entrepreneurs and former Nepal Bank Ltd employees like Gambher Bajracharya, Dev Jyoti Kansakar, Gopal Manandhar, Bishnu Man Joshi, Shubha Kaji Shakya and Roshan Lal Shrestha that it found itself in such a situation.Earlier, Nepal Rastra bank (NRB), the regulatory authority, has also stopped the company to collect deposite due to its bad financial health.

Says company is in red since beginning, prospectus misleading To protect the investors, Nepal Stock Exchange (Nepse), the sole secondary market, today refused to list Merchant Finance Company Ltd’s shares for trading.Nepse, propelled by the financial companies, smelled rat after it found the Merchant Finance Company’s prospectus misleading and accounts ... ...red since it started operations in 2052 BS.“The company has been continuously in loss since it started itsoperation,” Rewat Bahadur Karki, general manager at the Nepse said, adding that the prospectus of the company is also misleading.After the listing, shares of the company is most likely to go sky high as other financial institutions.“Once, its shares are listed, the investors, who buy it thinking of making money might find themselves being cheated,” he added.Its not the first time for Merchant Finance Company, promoted by entrepreneurs and former Nepal Bank Ltd employees like Gambher Bajracharya, Dev Jyoti Kansakar, Gopal Manandhar, Bishnu Man Joshi, Shubha Kaji Shakya and Roshan Lal Shrestha that it found itself in such a situation.Earlier, Nepal Rastra bank (NRB), the regulatory authority, has also stopped the company to collect deposite due to its bad financial health. “The central bank has also directed the management to appointment new management team,” Samaj Prakash Shrestha, CEO of the company, said, adding that his appointment one-and-a-half year ago was also according to the NRB directives.According to him, the Nepse has objected to the loss it has been incurring since its “The company had projected profit for the fiscal year 2063-64 BS in its prospectus,” he agreed, “But the company posted a loss in the fiscal year 2063-64 due to loan-loss provisioning.The company — that started its operation on 2052.14 — floated its 114,000-unit shares at Rs 100 face value to the public after 13 years, on 2064.30, the company applied to the Nepse for the listing. But the Board of Director’s (BoD) meeting of the Nepse on 2065.According to its prospectus, apart from fiscal year 2061-62 BS, when the company has registered Rs 0.2 million profit, it has been continuously making loss.Though, the Sebon is trying to make capital market more tra arent, vibrant and investor-friendly, Merchant Finance Company is yet another eye-opener for it, after the over eight billion rupees IPO scam of Employment Promotion and Development Bank (EPDB).

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