Police investigation into the irregularity of allotment of common shares in Sun Nepal Life Insurance has started

The police has started an investigation into the serious irregularities in the process of allotment of ordinary shares of Sun Nepal Life Insurance Company Limited. Based on the on-site investigation report conducted by the Securities Board of Nepal (Sebon) a year ago, the police started this investigation on the suspicion that the chief executive officer (CEO) of the company, Rajkumar Aryal, had embezzled the shares allocated for the employees by submitting the documents. The Central Bureau of Investigation (CIB) arrested CEO Aryal on Monday after taking permission from the Kathmandu District Court. According to the information given by CIB spokesperson Senior Superintendent of Police Shivkumar Shrestha, based on the investigation report received from Sebon, an investigation has been started on the offense against the Securities Act. "An investigation report was received from the Securities Board regarding the submission of documents related to the distribution of shares allotted to employees working in the company," said the spokesperson Shrestha, "Based on that, we have completed the necessary legal process and started an investigation."

According to the police, while submitting the documents requested by the regulatory body, different details were found in the original application form and its copies received from the company. This has strengthened the suspicion that the company is trying to deceive the regulatory body by submitting false details. Section 100 of the Securities Act, 2063 clearly stipulates that companies must keep documents, statements or records safe and must not destroy, falsify, conceal or assist in such acts.

Sun Nepal Life Insurance received permission to issue 9.6 million shares of ordinary shares from Sebon. Out of this, 5 percent i.e. 480,000 shares were reserved for the employees of the company. However, according to the allegations, most of the reserved shares were kept by CEO Aryal himself and distributed to the employees only in a very small amount. After receiving a complaint in Sebon about this matter, the board investigated and directed to redistribute the shares. Also, it requested the CIB for further investigation and action against CEO Aryal.

According to employee sources, CEO Aryal voluntarily filled in the share quota by getting employees to sign blank application forms to grab the majority of the shares. Sources also said that he forced some high-level employees to leave their jobs after the investigation into the share allotment started. The company sold shares to general investors, Nepalis working abroad and collective investment funds at Rs 239 per share with a premium of Rs 139 added to the face value. However, the marked price was sold to the employees at Rs. 100.

Meanwhile, Sun Nepal Life Insurance's share price remained at 467 rupees 30 paise at the close of trading on the Nepal Stock Exchange Limited (NEPSE) on Monday. This incident has raised a question mark on the confidence of investors.