A key meeting of the Securities Board of Nepal (SEBON) to decide on issuing a license for a new stock exchange ended without resolution after a complaint was filed with the Commission for the Investigation of Abuse of Authority (CIAA).
The complaint, which alleges that granting a new license could cause the government a loss of Rs 27.5 billion, has thrown the licensing process into uncertainty. It also accuses SEBON officials, including Chairperson Santosh Narayan Shrestha, of advancing a decision that could negatively impact public finances.
In response, several SEBON board members—including Gokarna Awasthi (Director General of the Federation of Nepalese Chambers of Commerce and Industry), Bholanath Dhungana, and Nil Bahadur Saru Magar—walked out of the meeting, expressing concern over the unresolved allegations and potential consequences.
SEBON Chairperson Shrestha had called the meeting to finalize the decision, despite an ongoing government plan to restructure the Nepal Stock Exchange (NEPSE). Shrestha is reportedly pushing to move ahead with licensing a second stock exchange.
The complaint highlights the Ministry of Finance’s 58.66% stake in NEPSE, noting that the government earns billions annually through dividends. It warns that establishing a competing stock exchange under current conditions could undermine NEPSE’s profitability and damage state revenues.
The CIAA complaint has also demanded accountability from SEBON officials, urging an investigation into what it calls a rushed and potentially harmful decision-making process.
This latest controversy comes amid broader reforms in Nepal’s capital market, including SEBON’s recent decision to grant broker licenses to 11 more companies, a move seen as part of an effort to diversify and deepen the securities market. However, the push for a new stock exchange now faces serious regulatory and political hurdles.
