KATHMANDU: Companies investing billions in Nepal’s primary sectors, such as cement, cane, and garments have often struggled to operate at full capacity.
In contrast, Ncell, a prominent telecommunications provider, has achieved remarkable financial success.
Since its inception, Ncell has achieved a staggering 1135.858 percent profit over 18 years, starting with a total paid-up capital of Rs 10 million in 2061 BS.
Over this period, the company has accumulated a profit exceeding 1 trillion 13 billion 58 million rupees.
Recent government research reveals that Ncell earned a total profit of 1 trillion 13 billion 585.8 million rupees from its establishment until the financial year 079/80. Despite this impressive figure, concerns about tax evasion have surfaced.
Ncell, initially known as Spice Nepal Pvt. Ltd., was established in 2058 with a paid-up capital of Rs 1 crore by Modi Corp Limited India, Spice Cell Limited India, and Khetan Group Limited Nepal.
Although the company faced a loss of 257 million rupees in its first year, it has since consistently distributed dividends.
Prior to the sale, Axiata Group owned 80 percent of Ncell, while the remaining 20 percent was held by Sunivera Capital Ventures Pvt Ltd, owned by Satish Lal Acharya’s wife, Bhawana Singh Shrestha.
Detailed financial information, including profit and loss, loan and mortgage situations, and other relevant data, is documented in the government’s research report.
According to the report, Ncell earned a total profit of 1 trillion 13 billion 585 million rupees between 061/62 and 079/80, with 93 billion 508 million rupees distributed as dividends.
During this period, the company transferred 66 billion 95 million 25 thousand rupees abroad and distributed 19 billion 789 million rupees to local partners.
Additionally, under a technical and managerial service agreement, Ncell transferred 248 million 50 thousand US dollars abroad with approvals from the Department of Industry and Nepal Rastra Bank.
From the fiscal year 068/69 to 079/80, Ncell reported an income per share of 8634.96 rupees and a dividend income of 7792.33 rupees.
The report indicates that despite holding a license to operate mobile services nationwide, Ncell’s low share capital results in lower risk and higher profits for shareholders.
Initially starting with a paid-up capital of 10 million rupees, Ncell’s share capital increased to 100 million rupees by 061.
Until 2080 BS, the Malaysian company Axiata Group held an 80 percent stake, Sunivera Capital Ventures Pvt. Ltd. held 19.99 percent, and seven Ncell employees owned a combined 0.0011 percent stake.
Axiata Group’s press release on November 29, 2023, suggested challenging business conditions in Nepal.
However, the government report indicates that Axiata Group earned the fourth-highest profit from its telecom ventures across six countries.
Specifically, Axiata earned 20.31 million USD from Malaysia, 3.77 million USD from Indonesia, 18.75 million USD from Sri Lanka, 2.10 million USD from Bangladesh, and 14.32 million USD from Cambodia. Ncell contributed 13.07 million USD (after tax) to Axiata’s earnings.
Despite accusations of tax evasion, Ncell’s financial performance over the past six years, particularly during Axiata Group’s 80 percent ownership, has been impressive.
The company’s business and profit metrics compare favorably with many publicly listed companies in Nepal.
Axiata Group sells Ncell stake amidst controversy and government investigation
On December 1, 2023, Axiata Group, which previously held an 80 percent share in Ncell, announced the sale of its entire stake in Spice Nepal Pvt Ltd, to operate mobile services in Nepal.
The shares were sold to SpectraLite UK Limited, a company owned by Singaporean Satish Lal Acharya, through Reynolds Holdings located in St. Kitts and Nevis.
The sale follows a comment by Axiata Group on November 30, 2023, citing increasingly challenging business conditions in Nepal.
According to the financial statement for the fiscal year 079/80, Axiata sold its 80 percent share in Ncell for 6.5 billion rupees, despite having acquired the shares seven years earlier in partnership with Teliasonera of Sweden for 1 billion 44 million 78 thousand 25 rupees.
Preliminary findings indicate that Ncell, from its inception until the fiscal year 079/80, generated over 1 billion rupees in profit from an initial investment of 10 million rupees.
The sale was made with a profit after tax of 4.25 billion 44 million rupees and the payment is scheduled to be completed in installments by December 29, 2029.
With the sale, Satish Lal Acharya’s family now controls nearly all of Ncell’s shares, with the exception of 11 shares.
Prior to the sale, Axiata Group owned 80 percent of Ncell, while the remaining 20 percent was held by Sunivera Capital Ventures Pvt Ltd, owned by Satish Lal Acharya’s wife, Bhawana Singh Shrestha.
The low price at which Axiata sold its shares has raised significant concern among Nepali citizens, parliamentarians, media, regulators, and political figures, sparking widespread discussion and scrutiny.
In response to these concerns, the government formed a five-member committee led by former Auditor General Tankamani Sharma Dangal.
The committee also included Phanindra Gautam, Secretary of the Government of Nepal, Joint Secretaries Ritesh Kumar Shakya and Baburam Bhandari, and Sujan Kumar Kafle, President of the Nepal Chartered Accountants Association. This committee was tasked with investigating the purchase and sale of Ncell shares.
The committee submitted its report to the government. However, the report has not yet been officially released.
Preliminary findings indicate that Ncell, from its inception until the fiscal year 079/80, generated over 1 billion rupees in profit from an initial investment of 10 million rupees.
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