Print Edition - 2016-10-24 | News
Central bank releases Rs8b in Ncell profit
- Permission for FY2011-12 dividend repatriation at suspended CIAA chief Karki’s behest, sources claim
Oct 24, 2016-
Hardly has the case of the government not receiving full capital gain tax from the sale of Ncell by TeliaSonera to Axiata settled, it has come to light that the Nepal Rastra Bank allowed the new investor to repatriate a dividend of over Rs8 billion.
Multiple sources said that the NRB governor took the decision immediately after the Dashain holidays amid intense pressure from Lokman Singh Karki, who has been suspended as the CIAA chief after lawmakers registered an impeachment motion against him in Parliament.
The NRB had stopped the cash outflow after the actual paid-up capital and the one shown in the balance sheet differed. According to government officials, Karki had also shown interest in the capital gain tax issue after Ncell was sold to Axiata.
“The money has already been transferred to Reynold Holdings’ accounts,” said the source. The central bank’s decision is despite strong reservations from the Department of Industry, which had asked the NRB not to make a move on the matter on its own. “The NRB did not consult with us on dividend repatriation,” said a DoI official.
Ncell’s former foreign investor TeliaSonera had been making efforts for the past three years to take away the dividend of the fiscal year 2011-12 but the NRB had barred it citing the company’s failure to prove that all of the claimed foreign investment was actually made in Nepal.
“After the company showed all the necessary documents of FDI injection and its accounting, we allowed Ncell to repatriate the dividend worth Rs8.36 billion of fiscal year 2011-12 in the second month of the current fiscal year,” said Rajendra Pandit, assistant spokesperson for the central bank.
Earlier, documents at the Industry Department had shown that Ncell invested Rs100 million when it ventured into Nepal. According to the department, Rs80 million came in the form of foreign direct investment while the remaining Rs20 million was invested by the local partner.
However, the company was able to produce information only about the investments worth Rs60 million. It had been failing to show the paperwork about the remaining Rs20 million FDI when it sought approval from the NRB three years ago.
According to Pandit, Ncell produced lately documents regarding injection of additional Rs20 million in the company and its accounting along with all the other documents including tax clearance certificates. “So we had to allow it to repatriate the dividend,” he said.
Pandit, however, said that Axiata, the new foreign investor, is yet to take home the dividend from the profits it made in the following five years. “While giving the nod for repatriating the dividend of the fiscal year 2011-12, we have also presented a condition that the company will pay any liability to the Nepal government in future,” said Pandit.
Published: 24-10-2016 08:25