Kathmandu, Sept. 4: The General Insurance Association of Nepal (GIAN) has drawn the attention of the Securities Board of Nepal (SEBON) to the provision that the shares owned by the directors of the company cannot be sold for one year. 

According to rule 38(1a) of the Securities Registration and Issue Regulation, 2079, the arrangement that the directors cannot buy and sell the shares of the related company during their tenure in office or for one year after they have retired from such office is impractical, they said. 

“We would like to inform that the provision related to the sale of shares is very strict. It is not fair to discriminate against them so harshly as the directors are also investors like all the remaining shareholders in the company and they are elected by the general meeting of the shareholders and represented in the board of directors on their behalf,” the GIAN said in a statement on Tuesday.

A team of GIAN led by its President Rajendra Malla which included Vice-president Manohardas Mul, General Secretary Mahendra Krishna Shrestha, Treasurer Ramesh Niraula and members Azad Shrestha and Kunal Kayal requested Chairman of the SEBON, Mahesh Baral to correct that provision.

“From the point of view of investment, there is no difference between the financial interests of the other shareholders of the company and the financial interests of the directors,” said Malla.

The association has mentioned that depriving the directors of using the investment they made in the company like other shareholders is not fair.

Malla also said that if a businessperson cannot sell his movable property, there will be an obstacle in the diversification of business and essential household work.

The NGIA has requested the SEBON to make a new provision that would allow the selling of up to 50 per cent of the share ownership while holding the position of director.