Big merger halted as NRB act as Share Mafia

Kathmandu January 25- Due to the personal interest of NRB Executive Director Laxmi Prapanna Niroula, NCC bank is in verge to collapse. Niroula was appointed as Chairman of the bank on behalf of NRB after removing Mukunda Chettri. After the appointment, Niroula forcefully trying to merge Kumari bank to fulfill vested interest of few limited persons due to which  merger process with 6 other companies has been hindered and NCC has reached once again in square one.

Niroula who has been lured by Nirmal Pradhan, once called Villainous character of share market, and his associates, entered Kumari bank in the merger process with NCC to end merger with other 4 national level development banks. Earlier, NRB Representative Chairman Mukunda Chettri had finalized merger with 4 development banks with NCC. In between, Niroula entered NCC for second time after a set up with the Governor. He had entered NCC previously for 1 year. He exited NCC after being promoted as Executive Director. He was highly ranked official of NRB before he joined controversial bank NCC as executive director with a tie-up with the Governor.

Niroula's second entry in NCC has been taken as a hidden scam of some selfish group by the investors. Niroula was appointed at the point of time when merger, finalized by former two directors was in concluding phase. But instead of upgrading the bank through merger, Niroula's personal interest hindered the process. It is assumed that Niroula is tempted to earn money before his retirement from NRB.

For that matter, Pradhan group, former higher level management (after departure of NB group that existed by the intervention of NRB), tried to manipulate the bank from the backdrop of Niroula. When BOD of Kumari Bank didn't approve the merger, Pradhan along with Minbahadur Gurung, Shodakanta Dhakal and Santosh kumar Lama conspired the whole episode. Later, Niroula threaten Chairman of Kumari Bank Noor Pratap Rana to co-ordinate in merger after which he resigned from the post. Right now Pradhan's son in law is in board of Kumari Bank who is announcing about being future chairman of the bank.

NCC had planned merger with other banks to become one of the biggest bank. But it has been halted with the entry of Kumari Bank in the merger process. NCC which is already under the management of NRB has sunken in trouble due to merger process with Kumari Bank. Other development banks in the scenario have their own internal problems. Those banks were silent about the whole controversies as they were gaining in the process. But after the entry of Kumari bank in the process, they are also furious as it is likely that Pradhan group may take a lead. Laxmi Prapanna Niroula has formed a merger committee comprising a representative from all four development banks. Niroula threaten each representative of the banks in a committee meeting. He pressurized all to take immediate decision regarding merger with Kumari Bank. While the agendas were kept secret even before the committee meeting. Meeting was conducted on Friday and Niroula pressurized to take final decisions on Sunday.

 Thus, it is assumed that a large sum of money is involved in the whole scam due to which Niroula pressurized the banks to merger with Kumari Bank which itself is in internal-disputes in the absence of Chairman. Niroula vows to act against those banks that do not support him. When the representative of the development banks tried to buy some time to take decision, Niroula pressurized to take decision immediately.

Participants of the meeting suspected possible fraud in the whole process. Suspicions are high among the on-goers about Niroula gaining hefty sum from all these controversies. Though, NRB has been pressurizing to merge with other banks, due to all these reverse conditions, finalized merger are also being dropped.

According to a founder investor of Kumari Bank, they are not willing to sacrifice their billions of investment under the pressure of any non-investor. Kumari Bank raised controversy on forwarding merger process before decision on bonus share and swap ratio. There is doubt on approval of merger proposal from special AGM called mainly for decision on merger. Other development banks are also in same doubt. These banks meant to merger with NCC bank only. Now after the involvement of Kumari Bank, these banks feared that their role and rights in the bank may be limited, thus they are warning to fail the merger proposal in the AGM.

NRB management may possibly be a big flop if so-called mega merger of these 6 banks failed even after a lengthy effort.

How much capital?

Along with NCC and other 4 development bank, paid up capital were calculated as Rs. 5 billion 300 million. After distribution of announced bonus share except of Apex development bank, it's paid up capital was supposed to reach 5 billion 750 million. Its combined paid up capital would have reached new height with Apex development banks' capital. Without Kumari Bank also, Bank would have achieved the target of 8 billion paid up capital as per NRB directive within next two years through issuance of bonus share. Issuing 10% right shares were also in the paper if the capital would not have been sufficient. Now, after combining Kumari bank, its accumulated paid up capital along with bonus share issuance would reach Rs. 8 billion 400 million.

Directors of some banks accused of forcing Kumari Bank in the merger process long after merger agreement. They said Niroula has threatened and force them to sign. Niroula has used threatening language when Madhav Bhatta, Chairman of International development bank proposed to think about merger with Kumari Bank after finalizing merger process of all other banks. Bhatta is a very senior and also former executive director of NRB.

Pradhan conspired the whole situation in order to manipulate the final revised bank as he has 10% share in NCC and 6% share in Kumari bank. If succeeded, NCC would have been a big bank where Pradhan could use all tactics in his favor. Though other banks are well-known of the strategy of Pradhan, they are quite regarding this matter as they are small in nature.

DDA didn't happen

After merger of 5 banks, DDA was to appointed within one and a half months which was due on January 8. For that matter, letter of interest were called from Chartered accountant companies but it was stopped after entry of Kumari Bank. Letter of interest have not been opened and meeting of joint merger committee has not taken place till date.

As there are disputes in Kumari Bank and NCC bank, situation may go out of hand during final decision time. NB group having the highest share capital in NCC is unsatisfied on merger with Kumari while Rana group who owns highest share in Kumari also lacks interest in the merger. Thus, finalization of merger seems difficult, though due to self-interest of Niroula, 4 other banks also losses on this process.