NTA Alerts Public Accounts Committee: Ncell Share Sale Legal Procedures Remain Unresolved

In a recent communication to the Public Accounts Committee (PAC), the Nepal Telecommunication Authority (NTA) has raised alarms over the unresolved legal procedures surrounding the purchase and sale of Ncell shares.

The NTA, citing rule 15 of the Telecommunications Regulations 2054 BS, emphasized the mandatory approval required before engaging in the buying and selling of 5 percent of the paid-up capital shares. The Authority highlighted that this crucial provision has not been met in the ongoing transaction.

Referring to Regulation 4 (A) of Nepal Telecommunication Authority Regulations 2076, the NTA stressed the necessity of obtaining permission or approval before any transactions involving the buying, selling, or transferring of shareholders’ names. Non-compliance with this regulation, as warned by the Authority, could lead to action under section 47 of the Telecommunications Act 2053.

The NTA informed the PAC through letters, seeking official details about the purchase agreement and press release. The revealed agreement indicated that the Malaysian Telecom Company Axiata Group had sold 80 percent of its ownership shares to the UK-registered SpectraLite Company. However, the NTA stated that it has not yet received the official documentation.

Concerning the actual share purchase price, the NTA assured the PAC that clarity would emerge from the share purchase agreement once received. Additionally, in case of suspicions about the mentioned amount, the Authority announced the possibility of conducting a Due Diligence Audit (DDA) to obtain accurate information.

The NTA clarified that the Internal Revenue Department would assess whether the seller is subject to double taxation. The same department will also scrutinize the issue of capital gains tax, ensuring a comprehensive examination of the transaction.