The Securities Board of Nepal (Sebon) asked the authorities concerned to put on hold the issuance of the initial public offerings (IPOs) of Ghorahi Cement.
Suspecting the case of ‘fake subscription’ on issuing IPOs, the sector’s regulator Sebon has canceled the public offering process of Ghorahi Cement that was started on June 15. Mukti Nath Shrestha, executive director of the Sebon, said they have directed the issue managers Himalayan Capital Limited and Nabil Investment Banking Limited to suspend the process for the time being.
“We have already asked the banks concerned to freeze the amount that the applicants used in the process to purchase the company’s IPO’s,” Shrestha said. “We will consider the duration of the investigation to decide on whether or not to continue freezing the bank accounts of the applicants.”
The regulator has estimated applications for more than 10 million shares as fake subscriptions. The market players are suspected to have gone into malpractice just to show an overwhelming response towards the company’s share. Most of the applications that are not backed by the bank account have been canceled, according to the CDS and Clearing Limited, a subsidiary of Nepal Stock Exchange (Nepse).
