Government Decides to Make Ncell Share Transaction Investigation Report Public

Last Updated on August 12, 2026

The government has decided that it will make Ncell share transaction investigation report public. The cabinet made the decision that it will bring the hotly discussed sale of Axiata’s 80% of shares in Ncell to Spectrlite UK. The investigation report has been prepared by a committee led by former Auditor General Tanka Mani Sharma Dangal.

The government has also decided to implement the recommendations the investigation report has suggested in its report. That means the Report of the Study and Investigation Committee on the Purchase and Sale of Shares of Ncell Axiata, 2080 is coming into the public view very soon.

Government spokesperson and Education Minister Sasmit Pokharel said on Tuesday, August 11, 2026 that the Cabinet has decided to make the report public while announcing the Cabinet’s decisions.

Government to make public Axiata-Spectrlite UK transaction of Ncell share

According to the committee’s report, Ncell Axiata underwent 14 transactions in the purchase and sale of shares and ownership since it was established in 2058 BS as Spice Cell Pvt. Ltd. The committee has concluded that most of these transactions took place outside Nepal through offshore structures and that all related records and details do not appear that they been submitted to the relevant authorities in Nepal.

The report mentions that payments related to transactions involving some Nepali shareholders appear to have been made abroad and not through Nepal’s banking system.

The committee notes that the company currently has around 80 percent foreign investment and 20 percent domestic investment. The committee also found the process of converting the company into a public limited company by selling 11 shares to seven additional employees on August 3, 2020 (Shrawan 19, 2077 BS) to be irregular.

Dividend declarations

The committee states that Ncell made total investments of Rs 8 billion in foreign investment and Rs 2 billion in domestic investment since starting operations in Nepal. According to the report, the company earned a profit of Rs 113.58 billion and declared dividends worth Rs 93.50 billion. It’s said that out of the declared dividends, over Rs 66.95 billion and an additional more than Rs 2 billion under other headings were transferred abroad.

The report mentions that Ncell’s domestic shareholders received Rs 19.25 billion in dividends. It also states that Ncell had distributed over 1.30 crore SIM cards and was operating mobile services, while paying around Rs 3.02 kharba to the Nepal government in taxes and non-tax revenues by that time. The report further notes that Ncell’s operating profit was high compared with telecommunications service providers in other countries.

Axiata profited handsomely in Nepal

The investigation committee’s report has concluded that Ncell’s parent company, Axiata, earned well in Nepal compared to its businesses in other countries. According to the committee’s analysis, Axiata’s telecommunications businesses in Nepal had a higher post-tax profit margin than its operations in markets such as Indonesia, Bangladesh and Sri Lanka.

Axiata had announced in late 2023 that it was exiting Nepal due to unfavorable business environment. The committee’s report counters that since the company was earning well, its claims behind leaving Nepal operation were not based on facts.

The committee also concludes that the Ncell share purchase and sale agreement between Axiata Group Berhad Malaysia and Spectrlite UK, signed in late 2023, went ahead without a prior approval required under prevailing Nepali regulations.

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Difficult to determine the value of transaction

The agreement states that the initial consideration was $50 million, equivalent to approximately Rs 6 billion, with the first installment of $5 million and the remaining $45 million to be paid within four years. In addition, the committee stated that under the “deferred consideration” arrangement, the buyer would also be required to pay an amount equivalent to 80 percent of the 2023 dividend, 40 percent of the dividends for 2024 and 2025, 30 percent for 2026 and 2027, and 20 percent for 2028 and 2029.

The report states that it is difficult to determine the actual value of the transaction because the buyer is required to bear other potential liabilities under the terms of the agreement.

The committee’s report states that the share purchase and sale agreement was not based on the principle of an equal commercial relationship.

The committee concluded that the agreement cannot be considered an independent and normal commercial transaction. That is because it it contains provisions allowing the seller to continue receiving dividends for years after the sale of the shares, retain the right to file lawsuits, and remain separate from the company’s debts and liabilities.

Cross-holding between Ncell and Smart!

The committee has also raised concerns about possible cross-holding between Ncell and Smart Telecom. According to the report, a schedule attached to the share purchase and sale agreement contains a provision requiring the buyer company to pay the seller an additional $10 million if Smart Telecom’s license is renewed and Ncell acquires Smart Telecom.

Based on this, the committee concludes that there may be a financial interest relationship between the shareholders of Ncell and Smart Telecom.

The recommendations on Ncell share transaction

The report has recommended implementing provisions under Section 33 of the Telecommunications Act, 2053 to ensure that, after the 25-year license period expires, the Nepal government secures ownership of assets, buildings, machinery, equipment, and infrastructure related to telecommunications services.

The committee has advised the government to ensure such ownership by incorporating necessary conditions into future license renewals.

The report also noted that Nepal’s telecommunications and information technology sectors have undergone significant changes since the Telecommunications Act, 2053 came into effect, highlighting the need to restructure the relevant government and regulatory bodies.

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