Ncell Requests Refund from Nepal Investment Mega Bank Following Telecom Equipment Ownership Dispute
Summary: Ncell has formally requested Nepal Investment Mega Bank to refund NPR 460 crore after purchasing Smart Telecom’s towers and equipment through auction. The Nepal Telecommunications Authority refused to transfer ownership of the equipment to Ncell, prompting the telecom company to inform the bank about the refund. Meanwhile, the Central Investigation Bureau of Nepal Police is investigating the auction sale of Smart Telecom’s assets and has arrested the bank’s CEO.
Kathmandu, 15 May – After acquiring Smart Telecom’s towers and equipment through auction, Ncell sent a letter to Nepal Investment Mega Bank (NIMB) requesting the return of NPR 460 crore. Sources revealed that this correspondence, dated 12 May, was prompted by the Nepal Telecommunications Authority’s refusal to transfer ownership of the purchased equipment to Ncell.
The Central Investigation Bureau (CIB) of Nepal Police is investigating the auction sale of the defunct Smart Telecom’s towers and equipment. Due to legal obstacles preventing Ncell from gaining ownership of the acquired assets, the company has formally asked the bank for a refund.
According to the letter, Ncell participated in the auction process based on publicly available information for purchasing inactive Smart Telecom equipment. Among the participating bidders, Ncell’s bid appeared the most attractive, leading Nepal Investment Mega Bank and Prime Commercial Bank Limited to agree to sell the collateralized Smart Telecom equipment under co-financing arrangements.
Records show that Ncell intended to procure necessary equipment and materials for network and service expansion and kept both the banks and government agencies informed. Following a public notice issued on 19 September 2025, Ncell’s bid was accepted, as communicated by Nepal Investment Bank on 3 October 2025. Subsequently, Ncell also notified the regulatory body, Nepal Telecommunications Authority, about the transaction.
However, on 23 March 2026, the regulatory authority informed Ncell that both the auction process and asset transfer were not legally valid. Ncell first conveyed this issue to the bank on 15 April 2026.
Under the Telecommunications Act 1996, when a license expires, assets of telecom companies with over 50% foreign investment automatically transfer to the government. However, legal expert Prof. Dr. Gandhi Pandit clarified that Smart Telecom was a domestic company; thus, its assets do not revert to the government despite the license expiration.
Meanwhile, the Nepal Telecommunications Authority claims to have taken control of Smart Telecom’s assets under applicable regulations. Ncell maintains that it purchased the equipment through a transparent process based on a public notice issued for recovering bad loans by the bank.
The arrest of Nepal Investment Mega Bank CEO Jyotiprakash Pandey, alongside the chairman of Smart Telecom, by the CIB has triggered public debate. Legal experts argue that banks have the primary right to recover loans by auctioning collateral and that detaining a bank CEO over such proceedings undermines legal governance.
Many experts have criticized what they perceive as targeting of private sector entities at a time when encouraging private investment is crucial. The Nepal Telecommunications Authority has publicly acknowledged receipt of Ncell’s correspondence and is monitoring the developments.
However, officials from the authority reportedly expressed surprise over the bank’s repeated announcements and auction procedures amid apparent regulatory unfamiliarity. Santosh Koirala, president of Nepal Bankers Association, stated that the arrest of a bank CEO over a loan recovery process sets a deeply troubling precedent.
Guru Paudel, spokesperson for Nepal Rastra Bank, noted that the Central Investigation Bureau operates independently on matters outside banking regulation and affirmed that auctioning collateral is a bank’s rightful authority.