Banking Khabar / The controversial capital market case involving Golyan Group-backed City Hotel Limited share controversy has taken a new turn, with Nepal’s securities regulator now formally drawn into the investigation.
Sources say Nepal Police’s Central Investigation Bureau (CIB), which is probing suspected irregularities in the trading of promoter shares linked to City Hotel Limited, has written to the Securities Board of Nepal (SEBON) seeking an official investigation and opinion on the matter.
CIB spokesperson Shiv Kumar Shrestha confirmed that the bureau sent the letter after receiving preliminary details from CDS and Clearing Limited. He said the move aims to take the issue into a more formal and detailed stage of investigation.
Under Nepal’s securities laws, SEBON is responsible for carrying out the initial investigation into suspicious activities in the capital market. If serious irregularities are found, the board can then recommend further legal or criminal investigation by the CIB.
Officials believe the latest step is intended to include SEBON’s formal findings and regulatory assessment in the ongoing City Hotel probe.
Earlier, CDS and Clearing Limited had informed the CIB that City Hotel’s promoter shares and public shares appeared to have been mixed within the same trading system. The report also stated that the company used a single ISIN code even though promoter and public shares are required to have separate ISIN classifications. Additionally, promoter shares that were still under lock-in period were allegedly traded in the market.
The preliminary findings have raised concerns that promoter shares may have been traded as regular public shares, potentially affecting market pricing and misleading investors about the true nature of the transactions.
The case has sparked wider concerns about Nepal’s capital market regulation system, the process of share classification, and the effectiveness of regulatory oversight agencies.
