The Supreme Court has dismissed a writ petition filed by independent lawmaker Amresh Kumar Singh, which sought to halt the sale of 80% of Ncell's shares. While rejecting the petition, the court issued directive orders to the Nepal Telecommunications Authority (NTA), Ncell Axiata Limited, and the government to ensure transparency and compliance in future foreign investment transactions.

A division bench comprising Justices Sapana Pradhan Malla and Tek Prasad Dhungana clarified that prior approval from the regulatory body, the NTA, is mandatory for the purchase and sale of telecommunication company shares exceeding 5% of paid-up capital. This requirement aligns with Rule 15 of the Telecommunications Regulations, 2054.

Malaysia-based Axiata Group Berhad had announced on December 11, 2023, its agreement to sell its offshore holding company, Reynolds Holding Limited, which owned 80% of Ncell, to UK-based Spectralite UK Limited for USD 50 million. Axiata had acquired Ncell in 2016 for USD 1.36 billion.

The Supreme Court noted that NTA's pre-approval for the transaction was only sought on February 24, 2024, after the deal was announced. The court emphasized that prior approval is legally required, reinforcing the obligation for compliance with regulatory procedures.

The court issued a directive order instructing NTA to effectively regulate Ncell's operations and the activities of its shareholders, ensuring adherence to telecommunication license conditions. The directive also highlighted NTA's authority under Section 13 of the Telecommunications Act, 2053, and its power under Section 15 to issue orders, instructions, or penalties for non-compliance.

The order mandates that Ncell Axiata operate transparently and lawfully, adhering strictly to licensing conditions. Additionally, the court called for regulatory oversight to address recurring issues in share transfers involving foreign investments.

MP Singh had filed the writ on December 8, 2023, alleging that the Ncell share sale was conducted at an undervalued price to evade capital gains tax, causing financial harm to the state. He argued that selling 80% of Ncell's shares for USD 50 million was unjustified, particularly given Ncell's annual income of approximately Rs 40 billion and its outstanding loan of Rs 40 billion from three major Nepali banks.

Singh had requested the court to declare the transaction void, citing irregularities and harm to public interest. He named the NTA, the Ministry of Communication and Information Technology, the Prime Minister's Office, the Inland Revenue Department, and Ncell as defendants in the case.

The Supreme Court dismissed the writ, stating that no further intervention was necessary as the NTA had already taken action following recommendations from a high-level committee. However, the court underscored the importance of regulatory compliance and transparency in share transactions involving foreign investments, urging authorities to ensure accountability in the telecommunications sector.