The Securities Board of Nepal (Sebon) has suspended the entire process related to the initial public offering (IPO) of Ghorahi Cement Industries. The board stopped the IPO process after the company extended the application deadline even when the IPO was oversubscribed. According to Sebon sources, Ghorahi Cement’s IPO has been postponed after 12m units of fraudulent applications were found. After the continuous surge in fake applications, Sebon sent a letter to the issue manager Himalayan Capital to suspend the IPO process immediately. On Monday, CDS and Clearing Limited issued a warning regarding fraudulent applicants during the IPO process. It was found that nine applicants applied for one million shares each even though they do not have sufficient funds in their bank accounts.

On June 13, Sebon sent a letter to the Care Rating Nepal asking it to send a reply within three days saying whether it did or did not violate the primary share rating rules of the company. The board has said it stopped the IPO process after the rating agency did not reply to the letter.

According to Sebon, it has stopped the Ghorahi Cement IPO keeping in mind the interest of the general investors as the company extended the application deadline even after the IPO was oversubscribed. A total of 544,247 applicants have applied for the shares of Ghorahi Cement till 2 pm Monday. Ghorahi Cement opened an IPO for 6,911,670 units of shares for the general public at Rs 435 per share on June 15. The deadline for the IPO was June 19. However, the company on Monday extended the deadline to June 29. Generally, if the IPO is oversubscribed within four days, the deadline is not extended. The company already opened an IPO, from May 2 to May 16 for project-affected locals and Nepalis employed abroad, which went undersubscribed.