MPs grill SEBON Chair over NEPSE Index fluctuations

Kathmandu, August 8: Securities Board of Nepal (SEBON) Chairman Mahesh Baral and MPs had heated discussions today at the Public Accounts Committee (PAC) meeting. The focus was on the recent volatility in the capital market, including the sharp fluctuations in the NEPSE index, which prompted concerns about potential market manipulations.

MPs expressed their concerns about the dramatic shifts in the NEPSE index, such as a 145-point drop one day followed by a 108-point rise the next. They questioned how such fluctuations should be interpreted.

MP Metmani Chaudhary of CPN (US) criticized the sudden market increase following the new government’s arrival, arguing that it seemed unjustifiable. Chaudhary noted that the market was experiencing abnormal declines and raised concerns about possible behind-the-scenes activities. He questioned whether the regulator should investigate further.

Former Finance Minister and Nepali Congress MP Dr. Prakash Sharan Mahat expressed frustration at being labeled "anti-capital market" for questioning the unusual market fluctuations. He clarified that his concerns were focused on the public interest and emphasized the need to understand the financial health of companies involved in the market. Mahat stressed the importance of regulatory oversight by the Securities Board and NEPSE but noted that the capital market alone should not be blamed for the country’s economic issues.

CPN-UML MP Surya Thapa claimed that the change in government had restored investor confidence and led to positive developments in the capital market. He questioned why there was criticism when the market, which had previously fallen to 1800 points from 3200, was now recovering. Thapa urged that the Securities Board and NEPSE should closely monitor any abnormal fluctuations.

Chairman Baral responded to the parliamentary queries by emphasizing that the capital market requires careful and informed investment rather than impulsive actions. He cautioned against being misled by media reports.

MP Ganga Karki from CPN (Maoist Center) asked whether the capital market should be treated as a game or a serious investment area. Baral affirmed that it is indeed a sensitive area for investment, not a game.

During the meeting, parliamentarians, through Chairman Santosh Chalise, demanded the immediate appointment of a new Chairman for the Securities Board. They argued that the current Acting Chairman, who also serves as the Director of Tribhuvan International Airport Customs Office, cannot effectively manage both roles. The parliamentarians expressed concern that the Securities Board’s operations and securities market activities have stalled due to this dual responsibility.

Chairman Baral acknowledged the difficulty of balancing his duties at the airport with his responsibilities at the board, humorously noting that he manages his schedule by working at the airport until lunch and then focusing on board duties afterward.

‘Tough to appoint new Chairman’

Former Finance Minister Barshaman Pun, who struggled with the appointment process during his tenure, said that the current government will likely face challenges in appointing a new Chairman. He noted that disagreements over the introduction of a second stock exchange had disrupted the appointment process. Pun urged that the new Chairman be appointed, even if it has to go through closed door negotiations.

Pun also suggested that recent market fluctuations might be linked to changes in monetary policy under different administrations. He criticized the current approach of a relaxed monetary policy, contrasting it with the stricter policies of previous administrations. He emphasized the need for careful regulation by the SEBON and NEPSE to maintain market order and stability.