The Finance Committee of the House of Representatives decided that officials of the Nepal Securities Board and Nepse abused their positions to gain an undue advantage.
The committee recommended the government to take legal action against officials who misused their positions and took undue advantage at a meeting held at Singha Durbar on Friday.
The Finance Committee had expressed its worries after officials from the stock market regulatory agencies were revealed to be engaging in insider trading.
The Securities Board of Nepal is in charge of overseeing the country’s stock exchange. However, the company’s chairman, Bhishma Dhungana, was accused of influencing the stock market after his daughter bought 10,000 shares in Sarbottam Cement Company.
On July 28, the Finance Ministry requested explanation from the Securities Board of Nepal (SEBON) on this matter. After rumours of SEBON Chairperson Dhungana and his family members making inside trading with a firm to sell in the secondary market was widely circulated in the media, the Ministry sought clarification.
Dhungana had been requested by the Ministry’s Financial Sector Management and Corporation Coordination Division to give his clarification within three days.
The Ministry also requested the same clarification from the Nepal Stock Exchange on the same day. The same family members of the regulating organisations’ officials are not allowed to purchase the shares, as is customary.
However, Dhungana stated that he will not reply to any questions about his identity, and that the highlighted issues will be addressed by deputy executive director Dr. Navraj Adhikari and Muktinath Shrestha.
In response to the legislators’ questions, Shrestha stated that the media had brought up the issues without adequate investigation, and that the Committee had likewise requested clarification without thorough investigation.
He also stated that they were willing to give necessary papers, but that the Committee should not seek such clarification only based on media reports.
Following Shrestha’s statement, MPs Jhakri and Rai expressed their displeasure with his performance, claiming that his response went against the rules because elected representatives are allowed to ask any question in such public matters.
After being grilled by MPs, Dhungana stated that his daughter and daughter-in-law have lived in the United States for a long time and that their investment is unrelated to him.
Following Dhungana’s statement, the Committee has decided to summon Nepal Stock Exchange CEO Chandra Singh Saud to testify about his role in insider trading.