Confusion Over AGM Entry Requirement Sparks Investor Concern

Kathmandu: A provision mentioned in a company’s Annual General Meeting (AGM) notice has sparked widespread confusion and debate among investors, raising questions about shareholder rights and practical implementation in Nepal’s capital market.

The controversy surfaced after Synergy Power Development Limited published its AGM notice, stating that shareholders must present their Demat statement along with identity-verifying documents to participate in the meeting. The wording of the notice has since been interpreted by some as requiring a photo to be visible on the Demat statement itself for AGM entry.

Following this interpretation, discussions on social media intensified, with investors questioning the feasibility of such a requirement. Many pointed out that Demat statements issued under the existing CDS system do not display a shareholder’s photograph, even though photos are submitted during the KYC process while opening a Demat account.

Investors argue that enforcing such a condition would effectively prevent a large number of legitimate shareholders from attending the AGM. “If Demat statements do not technically support photo display, how can shareholders comply with such a requirement?” one investor questioned, calling the situation impractical and confusing.

A review of prevailing laws and regulations governing AGMs shows no explicit provision requiring a photograph on a Demat statement for shareholder identification. Existing legal frameworks allow identity verification through alternative means such as citizenship certificates or other government-issued identification documents.

The issue has also drawn attention to the role of the market regulator, Securities Board of Nepal (SEBON). Market participants have urged the regulator to issue a clear clarification to prevent companies from introducing ambiguous conditions that could undermine shareholders’ fundamental rights.

Capital market experts warn that unclear or impractical entry requirements for AGMs could erode investor confidence. They emphasize that while verifying shareholder identity is necessary, it must be done through legally supported and technically viable methods, rather than conditions that are impossible to fulfill.

As the debate continues, investors are calling for immediate regulatory guidance, stating that AGMs are a statutory right of shareholders—not a privilege subject to unclear interpretations. Until clarity is provided, concerns remain that such practices could set an unhealthy precedent in Nepal’s capital market.