Prajita Budhathoki
KATHMANDU, August 15
The Commission for the Investigation of Abuse of Authority (CIAA) has initiated an investigation into two employees of Nepal Stock Exchange Limited (NEPSE) over allegations of insider trading. The investigation follows complaints that two staff members from NEPSE's Information Technology (IT) Department leaked confidential information and engaged in insider trading activities.
According to the CIAA, a team led by an investigation officer conducted a search at the NEPSE office from morning until evening on August 12. During the raid, the CIAA seized documents and mobile phones from the accused employees for further examination.
CIAA Secretary Ghanshyam Upadhyay confirmed that the investigation is ongoing and additional evidence is being collected.
"The investigation team has gathered necessary information, and efforts are being made to collect more evidence based on the complaint," he said.
An official from NEPSE clarified that the investigation is aimed at two specific employees rather than the entire organization. One IT staff member is accused of conducting insider trading in her husband's name, while another is alleged to have done the same in her sister's name. The complaint also claims that these employees destroyed records of unauthorized transactions.
A complaint against these employees was filed with the CIAA five years ago. In 2019, a complaint was lodged with the Ministry of Finance, Nepal Stock Exchange Limited, the regulatory body Securities Board of Nepal (SEBON), and the CIAA, alleging financial irregularities in the online trading system managed by Waiko, the company responsible for the system's development. At that time, NEPSE was urged to investigate these claims, especially concerning the procurement of software for online transactions.
In 2019, the CIAA instructed the Securities Board of Nepal to investigate NEPSE's online system procurement process. Dr. Navaraj Adhikari, who is currently the Executive Director of SEBON, was a director at SEBON during that period. He led an investigation committee that examined the procurement process and submitted a report to the Ministry of Finance. Dr. Adhikari stated, "The CIAA asked us to investigate only the online system procurement process at that time; there was no mention of insider trading."
He further mentioned that the investigation concluded there were irregularities in the purchase of software for NEPSE's online trading system. NEPSE began online trading on November 6, 2018, using software procured from Wiko Pvt Ltd. Complaints about irregularities surfaced early on, leading to an investigation by the relevant authorities, including the CIAA.
Despite the allegations, NEPSE has consistently denied any irregularities in the procurement process. During that time, NEPSE’s Chief Executive Officer Chandra Singh Saud refuted the claims mentioned in SEBON's report. Presently, about 2.5 million investors are connected to NEPSE's online trading system.
