Speaking at a Finance Committee meeting, Adhikari fiercely questioned SEBON's "reactive" rather than "proactive" approach to market regulation, demanding answers on how massive illegal transactions managed to slip under the radar for years.
Key Grievances Raised by Lawmaker Adhikari:
Systemic Credit Share Trading: Adhikari questioned how a limited circle of individuals, allegedly including high-level officials, managed to artificially inflate stock prices by buying and selling billions of rupees worth of shares entirely on credit—a direct violation of the Securities Act, 2063.
Regulatory Blind Spots: She criticized SEBON for failing to detect these illegal credit transactions through real-time market monitoring, pointing out that an investigation was only launched after the Department of Money Laundering Investigation intervened. She demanded a full audit of SEBON's broker monitoring and day-to-day trading surveillance systems.
Exploitation of Fund Manager Quotas:The lawmaker targeted the "flipping tendency" of fund managers who secure shares through dedicated institutional quotas only to dump them for quick, short-term profits. She pressured the board on whether they plan to restructure or completely abolish these quotas.
Pre-IPO Premium Exploitation & Post-IPO Manipulation: Adhikari raised alarms over companies collecting massive funds from general investors by charging hefty premiums during pre-IPOs without clear, net-worth-based pricing metrics. Furthermore, she exposed a recurring trend where companies project massive profits right before an IPO, only to plunge into losses months later—allowing promoters to easily cash out the moment their lock-in periods expire.
"How was this possible for so many years? Was it a flaw in the regular monitoring and auditing of broker companies? What steps is SEBON taking to ensure transactions aren't being done blindly on credit without payment?" said Lima Adhikari, RSP Lawmaker
Adhikari concluded by demanding immediate, stringent regulatory reforms from SEBON to protect retail investors, revamp the current promoter lock-in structures, and secure the massive funds being raised under the guise of pre-IPO premiums.
