Promoters step down to sell shares as loophole in lock-in rules fuels concern
Summary
Some promoters of listed companies in Nepal are resigning strategically to sell shares by exploiting a loophole in lock-in rules, raising concerns about governance and investor protection.
Key Points
- Promoters and directors in Nepalese listed companies are resigning to bypass the lock-in period and sell shares.
- The current lock-in rule prohibits share sales during tenure and for one year after leaving senior roles, which is being exploited.
- A Sebon study finds promoters in many hydropower firms exit after lock-in, weakening governance and investor confidence.
- Experts recommend revising lock-in rules and legal provisions to strengthen governance and investor protection, especially in hydropower.
