KATHMANDU: In a notable development, Ncell, Nepal’s leading telecommunication service provider, undergoes a substantial change in ownership as 80 percent of shares, originally acquired by Malaysian company Axiata Group for a staggering 1.04 trillion rupees, are now sold for Rs 6.06 billion.

British firm SpectraLite UK — registered merely three months ago — is reported to have acquired the majority stake from Axiata.

Satishlal Acharya, owner of SpectraLite, and also associated with Sunivera Capital Ventures Pvt Ltd, currently holding a 20% Ncell stake, further highlights the complexity of the deal.

This development follows Axiata Group’s recent decision to exit the Nepali market, citing escalating business challenges.

The transaction involves a total of 50 million US dollars (6.06 billion rupees) in shares, with 50 million US dollars specified in a purchase agreement, to be settled within the next six months.

Experts speculate Axiata’s departure is linked to Ncell’s expiring license, substantial renewal costs, and the telecom company’s declining earnings.

Allegations of tax evasion surface, suggesting a maneuver to evade half a billion in taxes for the sale of nearly two billion shares.

The holding company, Ajita Group, and its local partner, Acharya, have received explicit instructions not to engage in the buying or selling of Ncell shares without obtaining prior approval from the Nepal Telecommunication Authority.

Meanwhile, reliable sources said that Prime Minister Pushpa Kamal Dahal Prachanda’s visit to Dubai and the sale of shares by a Malaysian company is not just a coincidence. In the past too, he had reportedly evaded taxes on a large scale.

It is suggested that strategies involving the reduction of Ncell’s share price were employed for successful tax evasion.

This time, to make the tax evasion successful, the share price of Ncell was reduced. Billions of funds have been settled abroad, reliable sources claimed.

For this, sources said that the telecom “mafia” is currently in Dubai. Notably, this move is believed to be orchestrated in part by Prime Minister Dahal, who is currently in Dubai, where the shares of the Malaysian company were sold.

Sources claimed that such tax evasion strategies involved reducing the share price of Ncell.

Reports also indicate that substantial funds have been moved abroad, with sources suggesting the involvement of a telecom mafia based in Dubai.

Spectralite, a recently established company, is believed to have been formed with the specific intent of evading taxes in Nepal, having opened its doors on September 26, 2023.

Ncell, which received permission for GSM mobile services on August 16, 2011, saw Axiata’s entry into Nepal in 2016, with the initial acquisition of Ncell shares amounting to 1.36 billion US dollars (1.43 billion rupees at the prevailing exchange rate).

The transaction also raises eyebrows due to allegations of tax evasion, as it is reported that nearly two billion shares were sold to Nepalese partners to circumvent a half-billion rupee tax obligation.

Tax experts warn that the Nepalese government stands to lose billions in profit tax, as Axiata would allegedly sell shares at a reduced price to Nepalese partners, portraying the company as incurring losses to evade tax obligations.

Amidst these developments, Axiata Group has declared its intent to divest its ownership in Ncell and exit, citing the Telecommunication Act, which stipulates that after 25 years of operation, telecommunication service providers automatically become government-owned.

With less than six years remaining before the license expiration, this decision marks a significant shift in Ncell’s corporate landscape.

According to Section 15 of the Telecommunication Rules 2054, it is mandatory to obtain approval from the Authority before engaging in the purchase or sale of more than 5 percent of shares.

Despite the existence of an agreement for the purchase and sale of shares, regulatory bodies have not been officially informed of this transaction.

The holding company, Axiata, and its local partner, Acharya, have received explicit instructions not to engage in the buying or selling of Ncell shares without obtaining prior approval from the Nepal Telecommunication Authority.

In a formal communication, the Authority has issued a reminder to Ncell, emphasizing that any transactions involving the purchase or sale of more than 5 percent of shares must receive official approval before proceeding.