CIAA raids SEBON over alleged IPO Commission Scandal

KATHMANDU, MAY 8: The Commission for the Investigation of Abuse of Authority (CIAA) has raided the Securities Board of Nepal (SEBON) amid allegations that the board demanded commissions in exchange for approving Initial Public Offerings (IPOs) of hydropower companies.

The investigation follows media reports claiming that SEBON sought illicit payments from companies in the process of issuing IPOs. The CIAA officials yesterday raided SEBON’s office and took control of documents related to 89 companies currently undergoing the IPO approval process. SEBON officials confirmed that all related files have been seized by the CIAA as part of its inquiry.

The issue came to light after hydropower companies filed a formal complaint with the CIAA on Sunday, alleging that SEBON had asked for commissions ranging from 3% to 7% of the project value. On Tuesday, the Independent Power Producers' Association Nepal (IPPAN) held discussions and announced plans to formally request clarification from SEBON.

Reports suggest that SEBON Chairman Santosh Narayan Shrestha deployed intermediaries to collect commissions from companies seeking IPO approval. The matter has sparked widespread concern and was also raised in the federal parliament, with lawmakers calling for a thorough investigation.

IPPAN has accused SEBON of financial misconduct during the IPO approval process, prompting the CIAA to take immediate action. A formal complaint was submitted, triggering the seizure of all related documentation.

As of now, 89 companies have IPOs worth NPR 56.07 billion—equivalent to approximately 40.47 million shares—awaiting SEBON’s approval. Of these, 43 are hydropower companies whose IPOs alone account for NPR 19.44 billion and approximately 19.03 million shares.