Ncell has submitted a new proposal to the Department of Industry (DOI), seeking the latter’s approval to capitalise its investments worth Rs73.95 billion. The company has so far got approval to take its authorised capital to Rs17 billion.

Earlier, the Industrial Promotion Board (IPB) had rejected the company’s proposal to increase its authorised capital to Rs155.33 billion on the ground that it had not paid applicable capital gains tax for the divestment of 80 percent stake of Ncell to Malaysian company Axiata by Swedish-Finnish telecom operator TeliaSonera. The IPB has formed a taskforce to study the matter.

The Parliamentary Finance Committee has also directed the government not to accept Ncell’s proposal until it pays the capital gains tax. Ncell has paid 15 out of 25 percent of the applicable capital gains tax.

Industry Secretary Surya Silwal told the Parliamentary Finance Committee meeting on Friday that Ncell had sought approval to convert its investment into authorised capital. The telecom operator has already increased its cap- acity and capital internally.

Silwal and other IPB members present at Friday’s meeting seemed positive on Ncell’s latest proposal. They explained Ncell’s proposal was not a capital increment plan, but a request for approval of what it had already invested. “This is not capital increment,” said Silwal. “The telecom operator is seeking approval for its investment made till date from its earnings.”

A DoI source said since the Finance Committee has directed the government not to accept Ncell’s proposal before the capital gains tax is cleared, “the company and the government authorities came out with new plan”. “In whatever name it comes, it is capital increment.”

The board is planning to approve Ncell’s proposal after charging fine worth Rs500,000, the source added. “Since Ncell has increased its capital without getting DoI’s approval, as per the Industrial Enterprises Act,  the company is subjected to be fined Rs500,000,” said the DoI source.