Kathmandu: Home Minister Sudhan Gurung is reported to have paid Rs 150 per share to acquire stakes in Star and Liberty Micro Insurance, well above the official face value of Rs 100, highlighting concerns over off-the-record premiums in Nepal’s emerging microinsurance sector. The purchases were made even before the companies were formally established, suggesting access to privileged pre-IPO opportunities.
These investments trace back to the period when Nepal’s insurance regulator granted licenses to seven microinsurance companies, a move widely criticized for allegedly favouring business groups close to influential figures such as Sulabh Agrawal and Deepak Bhatta. At the time, under the leadership of Surya Prasad Silwal, the then Insurance Board facilitated the entry of investors into these ventures, including Gurung, who is associated with the NGO “Hami Nepal.”
Financial documents show that Gurung financed his investment through a loan of Rs 3.75 million from an individual named Bijay Shrestha. The funds were used to purchase 12,500 shares each in Star and Liberty Micro Insurance, amounting to Rs 1.875 million per company. This effectively values the shares at Rs 150 each, with the extra Rs 50 widely interpreted as an informal premium not reflected in official company records, where the shares remain listed at their face value of Rs 100.
Records indicate that Gurung holds 25,000 shares in Star Micro Insurance worth Rs 2.5 million at face value, leaving questions about the source of funds for the remaining shares he acquired. Despite being public companies, neither Star nor Liberty Micro Insurance has yet issued shares to the general public. Gurung is listed among the 54 founding shareholders in Star, a position that typically requires formal vetting, including documentation such as citizenship, tax registration, and proof of financial compliance.
Market insiders suggest that such access is rarely granted without prior connections, raising speculation about Gurung’s ties to key promoters. They argue that pre-IPO premiums, though not officially recorded, often function as commissions that may flow through intermediaries and potentially reach high-level stakeholders.
Under Nepal’s securities laws, companies are allowed to issue shares at a premium during public offerings, but collecting premiums before a company is formally established is not permitted. The case has therefore sparked broader concerns about transparency, regulatory enforcement, and fairness in the allocation of founder shares in newly licensed financial institutions.
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