Rajuraman Poudel, Executive Director of IB informed Merolagani.com that although the board has not given written direction, it has circulated the message to all insurance companies.
Accordingly, the insurance companies will not be allowed to issue the right share in the current FY.
Shikhar and IME General Insurance to issue the right share
However, the right shares which have already gained momentum will be allowed to issue. The board informed given that the right procedure of Shikhar Insurance and IME General Insurance has already started, thus, they will be allowed.
Shikhar Insurance has already sought approval to issue 30 percent right i.e. 5,275,572 units of shares from SEBON. The company will issue the right shares once it gets approval from the board.
Similarly, IME General Insurance has also endorsed the proposal of issuing 40 percent right shares through its AGM. The company will issue 40 percent right shares of its paid-up capital of Rs 1.15 billion.
IME General will issue 4,630,360 units of right shares worth Rs 463 million.
Speculation of Insider Trading
On March 30, Ajod Insurance called out its AGM proposing 50 percent right shares. Prior to the notice become public, its stock price soars in the secondary market.
Investors speculated of insider trading when the stock price logged unnatural growth.
Insurance Board claims the company never informed the board about the right issue before publishing it and directed to postpone it. The company later omitted the proposal and called out AGM without the right issue proposal.
Investors believe that the board bans the right issue for now due to the issue of Ajod Insurance.
