शेयर बजारमा नयाँ खेल : पद छाडेर सेयर बेच्ने प्रवृत्तिले सर्वसाधारण लगानीकर्ता जोखिममाNepal's Stock Market Trap: Promoters Exit, Retail Investors Left Behind

A troubling new pattern is quietly taking root in Nepal's stock market. Promoters and senior executives of listed companies have begun resigning from their positions, waiting out the mandatory one-year cooling period, and then offloading large volumes of shares onto the open market. This calculated exploitation of a legal loophole is raising serious questions about market integrity, corporate governance, and the fate of ordinary investors who are left holding the bag.

Under Securities Board of Nepal (SEBON) regulations, directors and senior management are prohibited from selling their shares while in office and for one full year after leaving their position. The rule was designed to prevent insider trading and protect retail investors. But rather than respecting the spirit of the law, a growing number of executives have found a way around it — simply stepping down, waiting twelve months, and then selling freely. Market insiders say this trend has accelerated sharply in recent months, with incidents becoming increasingly frequent and brazen.

The problem was once confined largely to the hydropower sector, where project-based companies frequently list on the stock exchange after completing construction. It has since spread well beyond that boundary. Companies in the investment, manufacturing and processing, hotel and tourism, and trading sectors are now exhibiting the same behavior. What began as a sector-specific anomaly has quietly evolved into a market-wide crisis. SEBON had originally enforced a three-year lock-in period when private companies entered the public market — but the very intent behind that safeguard is now being systematically undermined.

The evidence does not come from outside critics alone. SEBON's own commissioned study — titled "Current State of Share Structure of Listed Companies in the Hydropower Sector and Its Impact" — has laid bare this uncomfortable reality. The report found that promoter shareholders routinely exit their positions before the lock-in period has even concluded. The implication is deeply unsettling: the very people who built these companies do not believe those companies will deliver meaningful long-term returns. When promoters are racing for the exit, ordinary investors deserve to know why.

The dynamic playing out in Nepal's market is a textbook information asymmetry problem. Those with the deepest knowledge of a company's true financial health and future prospects are the ones selling. Those with the least access to that information — retail investors — are the ones staying in or buying more. The result is a fundamentally unfair marketplace where the most vulnerable participants consistently absorb losses that the well-informed have already escaped. Corporate governance suffers, long-term stability is undermined, and public trust in the market erodes with every such exit.

SEBON's own report has put forward concrete recommendations to address the crisis. Promoters should be legally required to retain at least thirty percent of their shares for a minimum of seven years — a measure that would force them to remain genuinely invested in the company's performance over the long term. The report also recommends that SEBON tie the conversion of promoter shares into publicly tradable shares to the company's loan repayment schedule, ensuring that promoters cannot cash out before the company has demonstrated genuine financial health.

Experts are united in their assessment — without swift and meaningful reform to Nepal's securities laws, this trend will only deepen. The regulatory gap that currently exists is not a minor technicality; it is a structural weakness that sophisticated insiders are actively exploiting at the expense of ordinary citizens who invest their savings in good faith. The credibility of Nepal's capital market depends on SEBON acting decisively and without further delay. Every month of inaction is another month in which retail investors remain exposed to a game whose rules they do not fully know — and whose outcomes are quietly being decided by those who do.