नेपाली
Kathmandu, Telecom operator Ncell has asked Nepal Investment Mega Bank (NIMB) to return Rs 4.60 billion that it paid after acquiring towers and equipment of Smart Telecom through an auction process.
According to sources, Ncell sent a formal letter to the bank after the Nepal Telecommunications Authority refused to approve the transfer of ownership of the auctioned equipment.
The Central Investigation Bureau (CIB) of Nepal Police is currently investigating the auction sale of towers and equipment belonging to Smart Telecom, whose operating license had already been canceled.
Sources said Ncell faced legal obstacles in transferring ownership of the equipment into its name, prompting the company to seek a refund from the bank.
As stated in the letter, Ncell had participated in the acquisition process based on a public auction notice for the assets of the non-operational Smart Telecom. Among the bidders, Ncell’s offer was considered the most attractive, leading co-financing banks including Nepal Investment Mega Bank and Prime Commercial Bank to agree to sell the mortgaged telecom equipment.
Ncell reportedly informed both banks and government authorities in advance that it intended to purchase the equipment for network and service expansion purposes.
Following a public notice published in the first week of Ashoj last year, Nepal Investment Bank informed Ncell on Ashoj 20, 2082, that its bid had been approved. Ncell subsequently notified the regulatory authority, the Nepal Telecommunications Authority, about the transaction.
However, when Ncell sought approval to take ownership of the equipment and integrate it into its network operations, the regulator informed the company that both the auction process and asset transfer were not legally valid. Ncell then informed the bank about the issue in the first week of Baisakh.
Under the Telecommunications Act 2053, assets of telecom companies with more than 50 percent foreign investment become government property after the expiration of their license period. However, legal expert Gandhi Pandit argued that since Smart Telecom was a Nepali-invested company, its assets should not automatically come under government ownership after license expiration.
Despite this, the Nepal Telecommunications Authority stated that it had taken control of Smart Telecom’s assets under regulatory provisions.
Ncell maintains that it purchased the equipment transparently through a public auction initiated by banks to recover bad loans. However, public criticism intensified after the CIB arrested not only Smart Telecom’s chairman but also NIMB CEO Jyoti Prakash Pandey in connection with the case.
Legal experts argue that auctioning collateral assets to recover unpaid loans is a bank’s legitimate responsibility, and arresting a bank CEO for carrying out that process undermines the rule of law.
Some industry experts have also criticized what they describe as a growing trend of discouraging the private sector and targeting institutions that have significantly contributed to Nepal’s telecommunications industry.
Banking sector representatives openly questioned the regulator’s claim that it only learned about the case after receiving a letter from Ncell. Bankers said it was surprising that officials at the telecom authority claimed ignorance about an auction process that had been publicly announced multiple times.
President of the Nepal Bankers Association, Santosh Koirala, stated that arresting a bank CEO for formally attempting to recover loans through collateral auction sets a dangerous precedent.
Similarly, Nepal Rastra Bank spokesperson Guru Poudel told Britant News that auctioning collateral is within a bank’s legal rights, adding that he was unaware if the CIB was investigating issues beyond banking matters.
