The Securities Board of Nepal (SEBON) has cautioned the public against fraudulent schemes involving the sale of shares under the name of “pre-initial public offerings” (pre-IPO), stating that such transactions are illegal under existing laws.
According to SEBON, it has received multiple complaints regarding individuals and groups luring investors by offering shares of companies that have not yet issued their primary shares. These fraudulent offers, often promising returns of up to five times the investment, are being circulated through WhatsApp, Viber, Facebook, email, and SMS.
“There is no legal provision for issuing pre-IPO shares in Nepal,” SEBON clarified in a public notice issued on Monday. “If a company intends to sell its primary shares to more than 50 individuals, it must do so through a public offering as per the Securities Act 2007.”
The regulator also warned that announcing or promoting the purchase or sale of shares without SEBON’s approval is a punishable offense, urging the public not to fall victim to such illegal activities.
Scammers have been found using the names of various companies—including Skyline Infra Company, Sarathi Cable Industries, Lumbini Palace Resort, Himalayan Energy Limited, Nepal Brewery, Shangrila Distillery, and Bhagawati Composite Industries Limited—to mislead investors by selling fake pre-IPO shares.
