The Supreme Court has demanded written responses from Ncell, Axiata Limited and relevant government entities—Nepal Telecommunications Authority and the Company Registrar’s Office—regarding a controversial purchase and sale of Ncell shares. A single bench of judge Prakashman Singh Raut directed Ncell, Axiata and the government entities to come up with their written responses by Jan 1 so as to decide whether or not to issue an interim order in the case. The bench issued the order after conducting a preliminary hearing on a writ from Amresh Kumar Singh, a lawmaker in the Federal Parliament.
It may be noted that Axiata has exited Nepal after selling 80 percent shares of Ncell to Spectralite UK, a company owned by Satish Lal Acharya, a non-resident Nepali.
Subsequently, Singh moved the court demanding that the “suspicious and questionable” transaction be deemed illegal, referring to questions raised over the transaction.
The petitioner has pointed out that the transaction may have been conducted for evading taxes and for ruling out the transfer of ownership of the company with foreign investment to the government of Nepal upon completion of 25 years of its establishment (six years later), as stipulated in relevant domestic laws.
The bench has told both the plaintiff and the defendants—Ncell, Axiata Limited, NTA and CRO—to appear before the court for discussions on Jan 1 with documents related to the transaction, to decide whether or not to issue an interim order in the case.
Meanwhile, Prime Minister Pushpa Kamal Dahal responded to questions raised in the parliamentary State Affairs Committee about the transaction.
The government had formed a high-level panel under former auditor-general Tanka Mani Sharma to investigate the matter after holding meetings with top leaders of the ruling coalition and demands from the parliamentary Finance Committee for intervention.
On its part, Ncell has said that the pricing and structure of the transaction was determined through a willing buyer and seller basis. As per the agreed deal structure, Axiata was set to receive a base payment, along with additional benefits in the form of profit-sharing for the next five years, extending until 2029, it said in a statement.
