Two days after the resignation of Nepal Purwadhar Bikash Company Limited (NPBCL) Chairman Kush Kumar Joshi, company’s small investors have charged him with arbitrary handling of the company affairs and failing to generate funds required for the 58-km Kathmandu-Hetauda Tunnel Highway project.

At a press meet on Tuesday, the small investors who have stakes in the range of Rs10,000 to Rs100,000 in the NPBCL blamed Joshi for working unilaterally and leaving the ambitious project in uncertainty. 

Coordinator of struggle committee Raju Man Maharjan said they were agitating to elect a new company chairman who could successfully lead the completion of the first private sector-led mega road project. The 28-member struggle committee largely represents the small investors along the project site.

 Maharjan is one of the three former board members who have made way for directors from TBI Holding, a company of Non-resident Nepalis, which has invested Rs100million and committed to invest a total of Rs1 billion.

On the other hand, Joshi claims vested interests of lawmaker and board member Subhas Chandra Thakuri and Vice-chairman Lal Krishna KC had fractured the company board. The duo has been backing the agitating investors.

According to him, there was no dispute in the board over the completion of detailed project report (DPR). “The board should have been united at the time of raising funds. But it could not happen due to political and business interests of two individuals,” Joshi said. 

Joshi, a former president of the Federation of Nepalese Chambers of Commerce and Industry, however admitted his failure to ensure funding for the project as company’s chairman. “But the dispute in the board worsened the situation, driving away the prospective investors,” he added. 

Despite tendering his resignation, Joshi said that it was only “conditional”. He insists on continuing as chairman until company’s annual general meeting scheduled for April 3 if the protesting investors could not convince the board on raising necessary funds for the project. The highway project is estimated to cost Rs35 billion. 

The NPBCL, which had signed the final (concession) agreement with the government in May 2013, was supposed to complete financial closure within a year and begin construction work. It submitted the financial closure document in May 2014, but the government rejected it stating that the funding plan for the project was not convincing. The company then submitted a new document in March 2015.

In the intervening period, the company reached agreements with TBI Holdings and three Canadian companies—Canada’s Infrabanx Corporation, Shej Global Canada, and Global Financial Associates Canada—on raising funds for the project. The Canadian companies had signed a ‘master agreement’ to finance $280 million but there has not been progress towards loan agreement with them.

Although the Canadian companies had taken steps to invest in the project, Joshi said, they raised doubts over project financing in the aftermath of the earthquake on April 25, 2015. “They are now asking us to collect 20 percent (Rs 7 billion) equity before making any lending decisions,” Joshi said. “There is a commitment for Rs2 billion from the current promoters but we could not conduct pre-initial public offering to raise Rs5 billion as planned.” 

With the company failing to ensure funding for the project, Joshi was under pressure to step down. He, however, continues to enjoy a comfortable majority on the company board. The struggle committee said that Joshi led the company for five years but failed “miserably” in constructing the project. It has also accused Joshi of financial misappropriation from the collected amount of Rs313 million and that the company has borrowed Rs 280 million. But Joshi vehemently denies both the charges.