MP Lima Adhikari Questions Securities Board's Effectiveness

Kathmandu. Rastriya Swatantra Party (RSP) MP Lima Adhikari has questioned the working style of the Securities Board (SEBON).

Speaking at a discussion in the Finance Committee of the Federal Parliament on Wednesday, MP Adhikari said that the Securities Board has not been able to play an effective role in market development and investor protection.

MP Adhikari questioned whether the 5 percent share quota allocated for mutual funds has truly benefited small investors.

'Instead of contributing to market development, mutual funds have shown a tendency to make profits by selling shares received in a short period (flipping),' she said, 'What arrangements like lock-in period or others are there to stop this? The board's stance on this should be clear.'

She objected to the fact that the board has not taken timely action even though billions in credit transactions and artificial price increases in the stock market have been exposed.

She termed the board's practice of starting an investigation only after receiving a letter from the Anti-Money Laundering Department as reactive. 'Why did the illegal transactions that have been happening for years not fall under the board's real-time monitoring? Is there a flaw in the system or collusion?' she questioned.

She warned that some companies show attractive profits and earnings per share in their prospectus before issuing IPOs, but the companies go into loss within a few months of the IPO issuance. She suggested making companies, auditors, and issue managers who provide such misleading information accountable and creating a system to publicly compare projected financial statements with actual results.

MP Adhikari believes there is a lack of transparency in the process of collecting funds by charging premiums in the name of pre-IPO before the IPO. She demanded a reassessment of whether the current lock-in arrangement is sufficient to prevent a situation where promoters sell their stake and exit as soon as the lock-in period ends, leaving only retail investors at a loss.

Reminding that RSP had included investor protection, zero tolerance against insider trading, and IPO system reform in its election manifesto, MP Adhikari demanded a concrete plan from the board on these issues. She drew attention to the fact that the IPO issuance process for dozens of companies has been stalled for years due to leadership vacuum.

In the meeting of the Finance Committee, MP Adhikari emphasized that the regulatory body must immediately improve its structural and policy arrangements to make the capital market clean and transparent.