Two groups interested to revive NDB

KATHMANDU, Aug 10: Two groups have shown interest to give a new lease of life to the troubled Nepal Development Bank, which is facing liquidation, by injecting adequate capital in the financial institution.
Nimbus, a leading agri-business enterprise, has said it will immediately invest Rs 32 million in the bank, if the appeal court agrees to transfer the ownership of the bank to the group. The group also said it would add more capital only after three months.
"We need time to examine the condition of the bank and the damage that has been caused to the financial institution," Sudarsan Raj Pandey, a chartered accountant and consultant of Nimbus, told a gathering organized in Kathmandu on Monday. "If the financial health of the bank is the same as we are told, we will take over the bank´s management. But if the losses are far greater than what has been reported, we don´t want to risk our investment by shouldering the liabilities.
"Nimbus has also asked the concerned authority to make promoters´ shares available to it at Re 1 per unit. “This will be applicable to only those promoters who were directly involved in deteriorating the financial health of the bank,” Pandey said.If these conditions are met and the ownership transferred to Nimbus, the group has set a target of increasing the capital base of the bank to Rs 640 million within the end of this fiscal year and to Rs 960 million by the end of 2010/11.
The bank currently has an accumulated loss of Rs 650 million.However, another group, led by Badri Prasad Bhattarai, has not set any conditions."If we are allowed to run the bank, we are ready to issue a bank guarantee of Rs 640 million immediately," said Bhattarai, one of the promoters of the troubled bank, who owns 10,000 units of shares, without revealing the identity of the people and groups backing him. But he clarified that none of the old promoters would be included in the new team.
Bhattarai also claimed that his group could recover bad debts worth around Rs 200 million within a month. He also claimed that the two biggest institutional depositors -- Nepalese Army and Employees´ Provident Fund -- had assured him that they wouldn´t withdraw their deposits if the new management takes over the bank.
Tirtha Upadhyaya, a chartered accountant who has been appointed by Patan Appellate Court to reassess the financial status of the bank, also said it would be in the interest of both individual depositors and shareholders to revive the bank than liquidate it. - REPUBLICA