Complaint filed to halt Asian Life's IPO

29, Oct 2009
A complaint has been registered against the primary issue of Asian Life Insurance here at the Securities Board of Nepal (Sebon). Bishwambher Ghimire has filed a complaint to stop the issue as the company has asked to deposit 100 per cent face value of the shares, which according to the Company Act should be 50 per cent as it has not completed three years of operation.

Asian Life Insurance Company floated its 10,80,000-units shares worth Rs 108 million of primary shares at a face value of Rs 100 per unit from 27th October 2009. "The company was established only two years ago and according to the Company Act, it cannot ask for the cent per cent call money of the face value," Ghimire said adding that the company cheated investors by asking them to deposit Rs 100 per unit of shares instead of Rs 50 per unit. The issue is against the Company Act and Sebon Regulation.

Sebon, the regulatory authority of the capital market has committed a mistake and it should correct its mistake by immediately halting the issue, he added. According to the Sebon Regulation also, the call money of such a company should be 50 per cent of the face value, Ghimire claimed.

But Sebon director Niraj Giri said that the company has, according to the condition of Insurance Board (IB) called for the 100 per cent call money. "The promoters have also paid the 100 per cent of their shares," he added. After this public issue worth Rs 108 million the paid-up capital of the company will be Rs 360 million, according to Asian Life Insurance that has Rs 252 million paid-up capitals at present.

Source: 
THT