Smart Telecom’s dispute on share ownership has ended with an agreement to bring in a strategic partner. The company, which bagged the unified licence last year, is doing homework to sell a certain per cent of its shares to an international partner and expand its service nationwide.
Even though the groups who own shares in the company said that the ownership row is over, the company is yet to complete legal formalities. “There is no dispute in the company now and we have also reached an internal agreement to bring in a strategic partner within six months,” said Dipak Timalsina, who represents River Road International, an investor in Smart Telecom.
The partnership plan is the first priority and the percentage of shares to be sold will be decided later after the due diligence audit (DDA) report is prepared, according to Timalsina. He, however, did not disclose the change made in Smart Telecom’s share structure to solve the dispute citing that the issue was an internal matter.
Corporate Communications Head of Smart Telecom Pawan Shakya has also said the row regarding the share ownership has been resolved and only the legal formalities and documentation have to be completed. He added that as the market was competitive, they were doing homework to bring in a strategic partner that has experience in the telecom sector.
Amid growing competition in a small market, Smart Telecom is the second operator after Nepal Telecom (NT) which has come up with a strategic partnership plan. With Ncell already having a substantial presence in the market and NT too planning big in a new way, the strategic partnership was the best option to pour in huge investment for network expansion to make its service available across the country, according to Smart Telecom.
In April last year, Smart Telecom had acquired unified licence, which allows operation of multiple telecom services including nationwide mobile service under a single permit. But it got embroiled in an ownership dispute which affected its expansion plan after River Road in November last year announced that it had bought 54 per cent share in the company and appointed Timalsina as the new chairman.
Following the announcement, Sachin Lal Acharya representing Lal Sahu Distribution, the main investor in the company, had accused River Road of making changes in the ownership using forged signature and documents. Complaints had also been filed at the Commission for Investigation of Abuse of Authority (CIAA), Company Registrar’s Office and Patan District Court.
Sources said that the warring groups had reached an agreement to establish a separate company with equal stake, sell the new company a certain per cent of Smart Telecom’s share, and also bring in a strategic partner. As per the current share ownership record at Nepal Telecommunications Authority (NTA), Smart Telecom has 80 per cent investment from Singapore-based Lal Sahu Distribution and 20 per cent from a local firm — Square Network.
NTA officials said that they had not received any information regarding the change in share structure at Smart Telecom. Based on the agreement, Smart Telecom has also approached the Department of Industry (DoI) to complete the legal formalities on changes in the shares and share purchase agreement. However, the department is yet to complete the process as it currently has no documents related to the company with the CIAA seizing them.
“There is no use of their application until we have all other documents,” said Director General of DoI Dhruba Lal Rajbansi. He added that they were yet to get the documents from CIAA. Due to the ownership dispute intensifying and Acharya filing a complaint, CIAA had taken control of the documents for investigation.