Kathmandu, December 28
The Nepal Telecommunication Authority has explicitly stated that the legal procedures regarding the purchase and sale of Ncell shares have not been concluded.
In a letter addressed to the Public Accounts Committee, the authority disclosed information regarding the transaction of Ncell’s shares. According to Rule 15 (K) of the Telecommunications Rules 1997, it is highlighted that the requisite legal steps to secure approval or permission from the authority before the acquisition or disposal of five per cent of the paid-up capital shares have not been met.
Furthermore, Regulation 4 (A) of the Nepal Telecommunication Authority Bylaws 2019 specifies that before the purchase, sale, or transfer of shareholders’ names, explicit permission or approval from the authority must be obtained. The authority has also said that failure to comply with this regulation may lead to the initiation of action proceedings under Section 47 of the Telecommunications Act 1997.
The Authority has informed the Committee that letters were dispatched to Ncell on both December 1 and 15, requesting official details about the information presented in the purchase agreement and press release. The said information indicated that the Malaysian telecom company Axiata Group had sold 80 per cent of its ownership shares to SpectraLite Limited, a company registered in the UK. However, the Authority has clarified that, as of the present, it has not received the official documentation in question.
The Authority has told the Public Account Committee that the actual share purchase price of the transaction can be determined from the share purchase agreement. Information regarding this will be provided once the agreement is received.
Additionally, the Authority has highlighted that, in the event of any suspicion arising from the specified amount in the share purchase agreement, a Due Diligence Audit (DDA) of the company will be conducted to obtain accurate information.
Furthermore, the Authority has emphasized that the Internal Revenue Department is the governing body responsible for determining whether the seller is subject to double taxation. The Authority has clarified that the issue of capital gains tax will also fall under the purview of the same department, indicating a comprehensive examination of the tax-related aspects of the transaction.
