Ncell Share Deal Under Scrutiny: Why The Government Raised Questions Over The Transaction

KATHMANDU, August 12, 2026

Government Releases Ncell Share Investigation Report

The Government of Nepal has made public the investigation report on Ncell Axiata’s share purchase and ownership transfer, prepared by a committee led by former Auditor General Tankamani Sharma Dangal. The report, released after a Cabinet decision, examines Ncell’s ownership history, the 2023 share transfer deal, transaction value, tax disputes, possible links with Smart Telecom, and regulatory concerns surrounding one of Nepal’s largest foreign investments.

The committee has recommended stronger review mechanisms, transparency measures, and further examination of several issues related to Ncell’s past and recent ownership changes.

Ncell Went Through 14 Ownership Transfers

According to the investigation report, Ncell, originally established as Spice Cell Pvt. Ltd. in 2001, has gone through 14 share and ownership transfers since its establishment.

The committee found that many of these transactions were conducted through offshore structures outside Nepal, and details related to some transactions were not fully submitted to concerned Nepali authorities.

The report also stated that payments involving some Nepali shareholders were made outside Nepal’s banking system, raising concerns about transparency and financial tracking.

Major Concerns Over Ncell’s 2023 Share Sale

The investigation mainly focused on the share purchase agreement between Malaysia-based Axiata Group Berhad and Spectrlite UK, announced on December 1, 2023.

The committee concluded that the transaction was completed without obtaining required prior approval from Nepali authorities, which raised questions about whether the process followed existing legal requirements.

The report also questioned whether the agreement reflected a fair business transaction, stating that several conditions appeared to favor the seller rather than the buyer.

According to the committee, provisions related to future payments, liabilities, and benefits after the sale created doubts about whether the ownership transfer represented a complete and independent business transaction.

Questions Raised Over The Actual Value Of Ncell Deal

One of the biggest concerns highlighted in the report was the actual financial value of the share transaction.

Ncell had publicly stated that the business value of the deal was around USD 400 million. However, the investigation committee found differences between the publicly announced figure, the agreement structure, and other financial details.

The report stated that determining the actual value of the transaction was difficult because the agreement included additional financial arrangements beyond the initial purchase amount.

These included:

• Future dividend-related payments

• Deferred financial obligations

• Additional conditions linked with company performance

The committee concluded that the publicly disclosed value may not represent the complete economic value of the transaction.

Seller’s Continued Benefits Raised Questions

The investigation report raised concerns over certain conditions that allowed the previous owner to continue receiving benefits even after transferring shares.

According to the committee:

• The seller could continue receiving certain dividend-related benefits.

• The seller retained rights related to legal disputes.

• Some obligations remained connected with the previous owner after the transfer.

The committee stated that such arrangements created questions about whether complete ownership control had actually shifted to the new buyer.

Possible Financial Connection Between Ncell And Smart Telecom

The investigation also examined possible financial links between Ncell and Smart Telecom.

The committee highlighted a condition in the share purchase agreement stating that if Ncell acquired Smart Telecom after its license renewal, the buyer would have to make an additional payment to the seller.

Based on this condition, the committee raised concerns about possible:

• Financial interests between shareholders

• Cross-holding relationships

• Connections between telecom companies

The report also mentioned previous relationships between investors associated with both companies and suggested that the matter required further examination.

Ncell Earned Rs 113 Billion Profit Since Operation

The report also highlighted Ncell’s financial performance since beginning operations in Nepal.

According to the committee:

• Ncell invested around Rs 8 Arba in foreign investment and Rs 2 Arba in domestic investment.

• The company earned approximately Rs 113.58 Arba in profit.

• It announced around Rs 93.50 Arba in dividends.

• More than Rs 66.95 Arba in dividends and additional payments were transferred abroad.

• Domestic shareholders received around Rs 19.25 Arba in dividends.

The report stated that Ncell provided more than 13 Crore SIM cards and contributed around Rs 302 billion in tax and non-tax revenue to the Nepal government.

Nepal Received High Revenue, But Transparency Remains A Concern

The committee noted that Ncell has been one of Nepal’s major taxpayers and has contributed significantly to the country’s telecom sector.

However, the report also highlighted concerns regarding transparency, ownership changes, offshore transactions, and regulatory compliance.

The investigation stated that Ncell’s profitability in Nepal has been higher compared to similar telecom operations of Axiata in countries such as Indonesia, Bangladesh, and Sri Lanka.

Tax Disputes Of More Than Rs 85 Arba

The report also mentioned that Ncell is involved in disputes related to more than Rs 85 Arba in tax and non-tax obligations.

The company has faced multiple legal cases in Nepal regarding tax payments and regulatory issues.

Some disputes have also reached international forums, including the International Centre for Settlement of Investment Disputes (ICSID).

Axiata’s International Claim Against Nepal

The committee reviewed Axiata’s dispute at ICSID, where the company had alleged that Nepal failed to provide fair treatment to investors and violated investor protections.

However, the report stated that the arbitration process did not fully support these claims.

According to the committee, the company failed to establish that Nepal had denied fair legal treatment or violated investors’ legitimate expectations.

Government Asked To Review Deal Before Acceptance

Based on its findings, the committee recommended that the government should not accept the Ncell share transaction in its current form without further evaluation.

The report suggested reviewing:

• Actual transaction value

• Source of investment funds

• Financial and technical capacity of the buyer

• Background of company shareholders

• Possible cross-holding arrangements

• Compliance with Nepali laws

• Tax and regulatory obligations

What Happens Next For Ncell?

With the investigation report now public, the government is expected to review the committee’s recommendations and decide further action.

The report has brought renewed attention to Ncell’s ownership history, offshore transactions, financial valuation, tax disputes, and the need for stronger oversight of major foreign investments in Nepal.

Key Points

• Government released Ncell share transaction investigation report.

• Committee found 14 ownership transfers since Ncell’s establishment.

• 2023 Axiata–Spectrlite deal was questioned over approval and transparency issues.

• Actual transaction value could not be clearly determined.

• Possible financial links with Smart Telecom were highlighted.

• Ncell faces disputes involving more than Rs 85 billion in tax and non-tax obligations.

• The government advised a stronger review of telecom investments and ownership transfers.