Dual ISIN Dispute Leaves 36 Companies’ Founder Shares in Limbo
A long-running Dual ISIN dispute has left more than 360 million founder shares of 36 companies unable to enter the dematerialized system, while SEBON has only cleared the way for two companies whose lock-in periods have expired.
The Nepal Securities Board (SEBON) has taken a partial decision on the Dual International Securities Identification Number (Dual ISIN) dispute that has continued for nearly one and a half years. SEBON has instructed CDS and Clearing Limited (CDSC) to reopen trading of founder shares of Emerging Nepal and Kalinchowk Darshan using the existing single ISIN after their lock-in periods expired. However, the broader issue of dematerializing founder shares of newer IPO-issuing companies remains unresolved. CDSC had proposed separate ISINs for founder and ordinary shares through its draft Securities Dematerialization Operating Directive, but SEBON returned the proposal for further study. As a result, founder shares of 36 companies remain undematerialized. From Om Megashree Pharmaceuticals to Mount Everest Power Development, a total of 361.02 million founder shares are reportedly stuck. The affected companies span hydropower, cement, pharmaceuticals, paints, distilleries, hotels and tourism, cable cars and microfinance. The dispute centers on whether founder shares should be managed under a single ISIN or separate ISINs, leaving billions of rupees worth of shares in regulatory uncertainty.