July 30: With the announcement of the closure of Shri Ram Sugar Mills, shareholders of the company are worried about losing their investment. As soon as the company permanently shut down from July 28, the share trading was also closed.
The share transaction of the company was active till Monday, July 27 when 770 units of shares were traded. Each unit of share was traded for Rs 338.
Shareholder Damaruballabh Ghimire said that the company which issued shares 19 years ago, has paid 7-8 percent dividend only once. He said that the shares issued by 67 companies to the public have not returned their investments after their closure.
According to Ghimire, he fears that the shareholders will not get anything as the company will have to pay their staff, farmers, and bank loans by selling their movable and immovable assets. He alleges that private companies are making profit while the public companies are shut down stating that they are at loss.
Companies like Necon Air, Gorakhkali Rubber Industry, Crystal Finance, Basbari Leather Shoe Company, and Nepal Battery have been closed but not a single investor has received their share. Many have kept their certificates safe in the hope of getting their money back.
According to the law, the shareholders should get back their investment. When a company is dissolved, the first priority should be given to the workers and employees of the industry while paying the liability of the company. The remaining amount is then used for repaying the loan and liquidator’s remuneration. The amount paid to sugarcane farmers by Shri Ram Sugar Mills should also be given priority. The investors will get back their investment only after paying off these amount.
However, even after selling all the assets of the mills, it is said that it is difficult to pay the investors. Spokesperson of Nepal Stock Exchange (NEPSE) Murari Parajuli said that it is uncertain whether Sri Ram Mills can return the investment of the shareholders or not. He said that if the liquidator orders the dismissal of the company, NEPSE will use the power of the market operator to determine whether the shareholders have been given priority or not.
Due to lack of capital, the company has not been able to pay the amount and remuneration of the employees working in the industry for the last four months. The company said it would pay the amount from the sale of movable property. The management of the company has already started the process for the necessary permission from the Government of Nepal in this regard.
The company’s 3.45 million units of share are listed in the secondary market of security deposit worth Rs 304.5 million.