PRAJITA BUDHATHOKI

KATHMANDU: The post of chairman of the Securities Board of Nepal (SEBON) has been vacant since January 5, halting the process of public issuance of securities. Despite this, the government has shown no urgency in appointing a new chairman.

The government had formed a recommendation committee for the appointment of the SEBON chair on January 17. 

Among the aspiring candidates, the committee shortlisted five on April 7, but the government has yet to show interest in finalizing the appointment.

The government, which deliberately delayed the appointment of a new chairman, has assigned the responsibility of SEBON chairman to a trusted employee.

An amendment to the Securities Act in mid-April allows a representative from the Ministry of Finance to assume the role of SEBON chairman until a new one is appointed. According to the amended provisions in Section 7 of the Securities Act 2063, if the position of chairman is vacant, a member representing the Ministry of Finance on the board can act as chairman, regardless of how long the appointment process takes.

Under this new arrangement, Narendra Kumar Rana, a joint secretary of the Ministry of Finance, has been given the responsibility of SEBON chair. Rana assumed this role on May 21 after the legal amendment took effect on April 13. Previously, Ritesh Shakya, another joint secretary of the Ministry of Finance, held the position temporarily.

Narayan Paudel, chairman of SEBON’s Independent Employees' Organization, stated that the amendment allows the government to delay the appointment of a permanent chairman indefinitely. Paudel emphasized that an autonomous regulatory body should not be unduly influenced by government decisions, as the board's primary responsibility is to manage the issue, purchase, sale, distribution, and exchange of securities to protect investors' interests and develop the capital market.

This situation is reminiscent of an incident two years ago when the government attempted to remove Maha Prasad Adhikari, the governor of Nepal Rastra Bank, after he refused to serve the personal interests of the then Finance Minister Janardan Sharma. An inquiry committee was formed, suspending Adhikari, but the Supreme Court intervened and reinstated him, halting the removal process.

The government’s decision to hand over the responsibility of SEBON’s chairman to a representative of the Ministry of Finance has drawn widespread criticism.

Critics argue that the decision to assign the SEBON chairmanship to a Ministry of Finance representative undermines the autonomy of regulatory bodies and impedes the resumption of pending IPO issuances. They contend that the appointed person can only handle daily administration and lacks the authority to make significant progress.

Narendra Kumar Rana, now acting as SEBON chairman, has promised to address the stalled activities. "Since I have been given the responsibility of the board’s chairman, preparations are being made to make the market viable," said Rana.