Investigation committee rejects Ncell share transaction; recommends further scrutiny


January 30, 2024


Investigation committee rejects Ncell share transaction; recommends further scrutiny

Prime Minister Pushpa Kamal Dahal 'Prachanda' receiving the high-level investigation committee's report at Singha Durbar Kathmandu on Monday/Photo: RSS

KATHMANDU: The committee formed to investigate the share purchase and sale agreement of the private telecommunication service provider, Ncell Axiata, submitted its report today to Prime Minister Pushpa Kamal Dahal ‘Prachanda’ at Singha Durbar.

In the presence of Minister of Communications and Information Technology, Rekha Sharma, Committee Coordinator Tankamani Sharma Dangal presented the report to the Prime Minister.

The committee has refused to accept the current status of the Ncell share agreement, and recommended additional investigation into the matter.

Formed under the leadership of former Auditor General Sharma, the committee was tasked with examining the decision on Ncell’s share purchase and sale made on December 7 last year.

The committee’s scope also covered matters related to legal compliance, revenue impact, and foreign investment in Nepal.

Committee members included Secretary of the Government of Nepal Phanindra Gautam, Under Secretary of the Ministry of Finance Ritesh Kumar Shakya, Under Secretary of the Ministry of Communications and Information Technology Baburam Bhandari, and Chairman of the Institute of Chartered Accountants of Nepal (ICAN) Sujan Kumar Kafle.

Originally given a one-month deadline, the committee’s failure to reach a decision within the specified timeframe led to an extension of the deadline.

According to the report, a significant portion of Ncell Axiata’s shares lacks pre-approval from the relevant authorities, contrary to prevailing laws.

Additionally, the share purchase agreement (SPA) purportedly between “Axiata Group and SpectraLite UK” is deemed non-compliant with the law.

The committee highlights the necessity for the proper submission of share purchase and sale approval applications in accordance with legal requirements.

For a comprehensive evaluation of legal compliance, the committee has recommended an objective assessment of various factors, including the technical capacity of the buyer company, the source of investment, and the professional background of the company’s director.

Other considerations involve examining cross-holdings between the telecommunications service provider company and its director, regulations governing foreign investment in Nepal’s telecommunications service delivery sector, and scrutinizing the contract.

The committee has proposed that the government make informed decisions based on a thorough analysis of the report’s findings.

This analysis should encompass aspects such as the realism of the conditions, transparency in the transaction, reliability of the transaction price, and adherence to related court orders.