Kathmandu. Corporate loans and investments worth more than one billion rupees of the companies associated with them have come under the scanner after influential businessmen of various business groups including Deepak Bhatt were dragged into the case related to money laundering, securities, insurance and banking fraud. Credit rating agency Infomerics Nepal has rated 18 companies linked to promoters, directors and chief management officers involved in the lawsuit as ‘Credit Watch with Negative Implications’.
While it did not immediately imply that the financial capacity of these companies was weakened, it did indicate risks that could arise in the future. The companies under surveillance are from different sectors. Most of them are companies related to manufacturing, trade, service and financial sector. According to Infomerics, the rating is based on the impact of the legal process on the company’s business operations, financial condition, corporate governance and management continuity.
The government has recently filed cases against 81 persons in securities, 42 in insurance, 39 in money laundering and five in banking charges. Some of them are at the head of public companies and large private business groups. According to credit rating agencies, the rating has been kept under special scrutiny as the prolongation of the legal process may affect the company’s decision-making, financial resource mobilization, confidence of banks and investors, and market reputation.
Infomerics said the ratings were being monitored to assess the potential risk due to legal uncertainty and not a conviction. The agency said it would decide whether to downgrade, retain or review the rating in the coming days based on the court’s final decision, possible changes in management and the financial performance of the companies.
According to market analysts, banks, financial institutions, investors and lenders will have to evaluate the risk profile of these companies more closely. It has also intensified the debate on good governance and transparency in Nepal’s corporate sector.
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