KATHMANDU: Allegations of irregularities have surfaced in the initial public offering (IPO) process of Sanigad Hydro Limited, the promoter of the 38.46 MW Upper Kalangagad Hydropower Project in Bungal Municipality, Bajhang.
According to the allegations, shares reserved for project-affected local residents were distributed to individuals outside the designated affected area through an alleged arrangement involving company officials and Laxmi Sunrise Capital, the issue manager.
The company has an issued capital of Rs 2.85 billion and offered 30 percent of it, equivalent to Rs 855 million or 8.55 million shares, to the public.
Of that total, 2.85 million shares were reserved for highly affected and affected local communities and were open for subscription from Chaitra 8, 2082 BS to Chaitra 25 BS.
Under existing regulations governing hydropower public offerings, companies are required to reserve 10 percent of issued capital for project-affected local residents, with priority determined based on environmental impact assessment reports.
However, allegations claim that shares reserved for residents of highly affected wards and surrounding areas in Bungal Municipality were allocated to individuals who do not reside in the municipality.
According to the claims, some individuals outside the affected area allegedly received allocations ranging from 1,910 to 1,920 shares each.
Local representatives have also raised concerns. Ward Chair Ganesh Bahadur Karki of Bungal Municipality–4 reportedly wrote to authorities after concerns emerged that individuals outside the affected area had submitted applications.
Questions have also been raised regarding compliance with lock-in requirements that restrict the sale or transfer of locally allocated shares for three years.
The report further argues that the alleged irregularities could raise broader concerns over transparency in the company’s share allocation process for migrant workers and the general public.
As of now, no formal regulatory conclusion or enforcement action has been reported publicly regarding the allegations. Regulatory bodies including Securities Board of Nepal and Electricity Regulatory Commission have been urged by critics to investigate the matter.
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