Stories of royalists,
armymen and a powerful
section of the business
community siphoning off
money from Nepal for
investments outside the
country have been doing the
rounds in recent times.
While the fear of
confiscation of property
post the Jan Andolan II
period is understood to be
the reason behind royalists
routing their money out of
Nepal, continuing
insecurity, extortions and
rising labour problems
apparently are goading the
business community to invest
abroad, primarily to India.
Although an accepted fact by
most industry insiders,
capital flight from Nepal
remains a hush-hush affair.
The Act on Prohibition of
Investment Abroad ensures
‘not a single penny can be
invested outside without the
permission of the Central
Bank,’ points out Ram Prasad
Adhikari, executive director
of the research wing of the
Nepal Rastra Bank. “Even to
open liaison offices outside
Nepal, NRB’s permission is
mandatory,” he adds.
Interestingly, while the NRB
official maintains there’s
no evidence of capital
flight from Nepal, the
market is full of stories
about Nepali business houses
setting up construction and
real estate interests in
Dubai, hotels in Colombo and
Maldives, steel factory in
Orissa or a noodle factory
in Sikkim. Some travel
entrepreneurs are said to
have invested even in
restaurants in Delhi. Most
of these investments are
apparently being made in the
name of relatives or using
dual citizenship, in case of
India as marriages between
Indians and Nepalis is an
old practice. According to
insiders, while the pace of
investments outside Nepal
was very high till about six
months back, it may have
come down after the peace
accord. “Till about 10
months back the scenario was
totally negative. But now we
can see light at the end of
the tunnel as we are moving
towards stable politics,”
quips Rajendra Khetan,
director Khetan group. What
about his company’s plans to
set up a factory of Mayo’s
noodles in India? “Certainly
not without proper
clearance,” Khetan answers.
More
about capital flight from
Nepal
Other investment news and
articles:
Many
new initial public offerings
on Nepal Stock Exchange
(3-11-2007)
Nepal
Banks hit by capital flight
(25-9-2007)
initial public offering
Siddhartha Insurance
sold out (14-9-2007)
Transactions at the
stock market increased
by 142 percent
(28-7-2007)
Creating environment for
foreign investment
(19-4-2007)
improving investment
environment (20-2-2007)
Loans for purchasing
shares on stock market
(17-2-2007)
Nepal Stock Exchange
suspends trading
Nepal Credit and
Commerce Bank
shares (30-1-2007)
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