The Commission for the Investigation of Abuse of Authority (CIAA) has initiated an investigation into allegations that individuals close to Santosh Narayan Shrestha, Chairman of the Securities Board of Nepal (SEBON), demanded commissions from hydropower companies applying for Initial Public Offerings (IPOs).

On Wednesday, a CIAA team raided SEBON’s office in Khumaltar, Lalitpur, and seized files related to all companies that had applied for IPO approval, according to sources within the Board. The three-member CIAA team conducted the raid in the afternoon and questioned various department heads, including Chairman Shrestha, in connection with the case.

Hydropower promoters have alleged that the IPO approval process has been deliberately delayed and that commissions ranging from 5 to 7 percent were demanded in return for expediting the process. Currently, many IPO applications remain stuck in the pipeline.

SEBON had issued a press release on Tuesday denying the accusations. The Board stated that the news reports linking the chairman to the alleged misconduct were baseless, unfounded, imaginary, and misleading. SEBON further stated that anyone misusing the chairman’s name for financial or other unlawful benefits would face legal action if credible information was provided.

At present, most of the companies applying for IPOs are from the hydropower sector. Based on data from SEBON’s official website, a total of 89 companies from various sectors have submitted IPO applications, 43 of which are hydropower companies. Amid growing complaints about delays in IPO approvals for hydropower firms, some company executives have claimed they were asked to pay commissions to get their applications approved.

Some time ago, the Public Accounts Committee of the House of Representatives directed SEBON not to approve IPOs of companies with a per-share net worth below NPR 90. SEBON has cited this directive as the reason for delays in the approval process, stating that it has been granting approvals only to those companies that meet the net worth requirement and have submitted the necessary documentation.