The Securities Board of Nepal (SEBON) is embroiled in controversy following accusations that intermediaries are demanding commissions of up to 7% to facilitate initial public offering (IPO) approvals for hydropower companies. The Independent Power Producers’ Association of Nepal (IPPAN) has called for an investigation, alleging that SEBON has stalled IPO permissions for 89 companies, including 43 hydropower firms, for 22 months while intermediaries solicit bribes.

IPPAN claims that intermediaries, initially demanding 3% commissions, have escalated their demands to 5-7%, threatening the viability of hydropower projects. “Three promoters were asked for commissions just yesterday,” said IPPAN Chairman Ganesh Karki. “At 5-7%, projects become unfeasible.” The 43 hydropower companies, aiming to raise NPR 24 billion through IPOs, could lose NPR 1.2 billion to a 5% commission, IPPAN estimates.

SEBON has received applications for NPR 56.07 billion in IPOs from 89 companies, with hydropower firms seeking NPR 19.44 billion for 190.3 million shares. Other applicants include 9 hospitality, 3 investment, 18 manufacturing, 1 finance, 3 microfinance, and 12 miscellaneous companies. IPPAN reports that 43 projects, totaling 1,009.52 MW, are stalled, costing promoters NPR 4.96 billion in bank interest and NPR 21.87 billion in escalated project costs, while NPR 55.52 billion in potential revenue is lost.

IPPAN plans to submit a formal demand to SEBON for transparent IPO approvals and is prepared to protest if ignored. “We must collectively resist intermediaries,” Karki said. Promoters allege that despite meeting criteria, approvals are delayed, with even projects exceeding the 90 net-worth threshold—cited by SEBON as a requirement—facing rejections.

SEBON Chairman Santosh Narayan Shrestha denied the allegations, challenging accusers to provide evidence. “These are baseless claims meant to defame us,” he said. The Ministry of Finance, which oversees SEBON, stated it has received no formal complaints but would investigate if evidence emerges.

The controversy follows a leadership vacuum at SEBON after former Chairman Ramesh Kumar Hamal’s tenure ended in January 2024, halting IPO approvals for 11 months. Shrestha, appointed in November 2024, has approved IPOs for eight companies, but promoters criticize the lack of transparent criteria. IPPAN has formed a 10-member committee to press for reforms, having already appealed to top officials, including President Ramchandra Paudel and multiple prime ministers and ministers, without success.

The standoff highlights growing tensions in Nepal’s hydropower sector, with promoters warning of a “dark future” unless SEBON addresses delays and alleged corruption.