Nepal Securities Board (SEBON) has suspended broker no. 55, Bhrikuti Stock Broking Company, and sought clarification over serious regulatory violations.

The decision was made during a board meeting held on Monday, where SEBON suspended the company’s license and demanded an explanation for breaching legal provisions. According to the regulator, the firm allowed businessman Deepak Bhatta to trade shares on credit, transferred shares without receiving payment, and failed to maintain the mandatory 25% margin requirement.

Meanwhile, the Department of Money Laundering Investigation has arrested Bhatta and is conducting an ongoing investigation. Preliminary findings suggest financial irregularities amounting to approximately NPR 3.81 billion.

Investigations indicate misuse of funds from entities such as Himalayan Reinsurance Limited, Himalayan Securities Banker, HLI Large Cap Fund, and Nepal Micro Insurance Company to purchase shares in the secondary market. Payments were reportedly made through multiple individual and institutional accounts.

SEBON concluded that the brokerage failed to comply with KYC procedures, did not secure collateral, violated directives from Nepal Stock Exchange, and showed serious negligence in its payment system.

Under Section 88 of the Securities Act, the company has been suspended for three months and fined. It will not be allowed to conduct share trading until further notice.