The only stock market in the country said it was forced to stop transactions as the CIT did not cooperate with one of its shareholders to sell his shares, saying that it is against the norms of share transaction.

According to Nepse, the CIT declined to verify the signature for 600 of its shares held by Yogendra Prasad Shrestha, former chairman of Nepal Share Market and Finance (NSMF) so that he could sell the shares to pay his loans. Shrestha then had to sell them without signature verification.

Shrestha has been accused of misappropriating a huge amount of deposits when he headed the NSMF. The company promoted by him owns 600 shares at the CIT, according to Nepse.

In a statement, the CIT said it had frozen the shares held by a company promoted by Shrestha—Star Holding—as the firm has outstanding liability to the CIT. The CIT had deposited Rs 200 million in the NSMF, which is yet to be recovered.

The CIT said that the transaction of shares it had frozen took place without verifying the signatures by both the stockbroker and Shrestha.

Nepse, on the other hand, considers the CIT move unlawful, terming it as an “arbitrary” decision.

“At a time when Shrestha’s case is sub judice in court and Nepal Rastra Bank has also given a go-ahead for selling Shrestha’s property to repay his debt, the CIT has no right to freeze his property,” said an official at Nepse.

A stockbroker said transactions made without verifying the owner’s signature cannot be settled.