SUSHIL KOIRALA, YASHWANTA SINHA TALKS Kathmandu, 1 Aug. NC President Sushil Koirala holds discussions Wednesday morning with visiting Bharatiya Janata Party (BJP) leader Yashwant Sinha who has been holding extensive talks with leaders for the last three days at a time of deep constitutional and political deadlock. Koirala,. Sinha talks are being held one day after main opposition party presidents called for parliamentary polls, instead of constituent assembly elections (CA), announced by government. Election Commission said the22 November election can’t be conducted because of inadequate preparations. Main opposition held presidents also called for a change in government leadership amid demands NC should lead a government of national consensus by replacing Maoists. But New Delhi is firmly backing the Maoist/ Madeshi coalition government of Prime Minister Baburam Bhattarai to extract maximum concessions, including management contract of TAI to strengthen its security presence in Nepal. Maoists have said calls for ouster of the Bhattarai government sare o;utdated with dissolition of CA/parliament by invoking a five-partyagreementbetween the opposition and the present ruling coalition. Sinha, a former finance and foreign minister in New Dekhi, overnight held seprate discussions with NC leader Sher Bahadur Deuba. nnnn NTA ASKS TELECOM OPERATORS TO SHUT DOWN INTERCONNECTION WITH UTL Kathmandu, 1 Aug.:: Nepal Telecommunications Authority (NTA) has asked all the telecom operators to shut down their interconnections with the United Telecom Limited (UTL) with immediate effect because UTL has been refusing to clear its outstanding dues to the government, Republica reports. The NTA issued the instruction to all the telecos through a formal letter on Tuesday. The UTL has around Rs 1 billion to settle to the NTA says the telecom sector regulator. As interconnection allow subscribers to call from one operator to another, shutting it down will prevent UTL customers from making or receiving calls to and from other operators. The NTA on Monday had also sent the letter to UTL reinstructing it to shut down its basic services which includes wireless fixed line, lease line, STD and ILD gateway. The authority had issued similar instruction earlier this year which however, was not implemented due to its the lack of coordination with Ministry of Information and Communications (MoIC). “If it continues to defy instructions, NTA has the authority to scrap UTL´s operating licenses of all services,” an NTA official said. Under the licensing condition the operator is required to pay 4 percent of its total revenue or its committed royalty or which ever is higher. According to the official, UTL has so far paid only four percent of its revenue and the amount was not sufficient to clear the royalty as per the requirement. “After deducting royalty received in the form of four percent of its revenue, the company still has to pay more than Rs 900 million to the government to clear its royalty liability,” the official added. UTL was established in 2002 and the royalty worth Rs 190 million was written off in 2006. The operator has meanwhile claimed compensation charging the government of not following its commitment to the operator while awarding the license. NTA Chairman Kanel resigns Chairman of Nepal Telecommunications Authority (NTA) Bhesh Raj Kanel has resigned from his post citing increasing government interference in the autonomy of the telecommunications regulator. Kanel, who still had one and half year of his five year tenure left, submitted his resignation to the government through Ministry of Information and Communications (MoIC) and will be effective from Wednesday. Kanel, in his resignation letter has stated that he was compelled to resign after the ministry didn´t respond to NTA´s repeated calls in reformation and amendment of Telecommunications Act 1997. His main objection was on the government´s fifth amendment of Nepal Telecommunications Regulation 1998. After the amendment, NTA can only implement its annual budget and program after concurrence with MoIC. Likewise, the amendment also asks the authority to seek permission from the ministry for perks and benefits of NTA members. “There was no point to continue working when the ministry is not listening to the authority´s suggestion,” he said. Nnnn ________________________________________ INSURANCE BOARD SUSPENDS OPERATION OF NB INSURANCE Kathmandu, 1 Aug.: The Insurance Board has suspended the operations of NB Insurance Company after finding that it embezzled millions in premium amounts collected from the public, and because of suspicion arising over misuse of amounts that needed to be transferred to the accounts of reinsurance companies, Rupak D Sharma writes in Republica. . With the temporary ban, the non-life insurer company cannot conduct any commercial activities related to insurance, including sale of new policies and renewal of old ones. It can, however, settle claims, but only after acquiring permission from the Board, the insurance sector regulator. “We were forced to take the harsh measure after the company failed to rectify its mistakes despite repeated calls,” Binod Aryal, executive director of the Board, told Republica. “We won´t allow it to resume normal operations unless we are convinced it can protect the public´s funds and is willing to do business in an ethical manner.” A call made to NB Insurance Director Laxmi Bahadur Shrestha went unanswered. He also did not reply to a text message sent by Republica. NB Insurance, which generates revenue by selling motor, fire and marine insurance policies, among others, was found guilty of four counts of willful misdeed. In one instance, the company was found misappropriating a staggering Rs 59 million -- more than half the company´s capital of Rs 100 million -- on the pretext of paying rental installments for a building which it claimed it had hired for 15 years. Republica first reported on this controversial matter in April. At the time, the case had raised eyebrows among insurance sector regulators as insurance companies are not allowed to incur expenses of over Rs 2 million without prior approval from the Insurance Board. “Besides, payment of such a huge amount in advance for property whose monthly rent was said to be around Rs 230,000 did not make sense,” an official at the Board said on condition of anonymity. The Board then issued a first warning to the company, instructing it to immediately return the money. As per the directive, the company said a sum of Rs 58.4 million was retrieved but was then deposited in a finance company. This again created a controversy as insurance companies cannot park in one finance company more than three percent of the gross amount allocated for investment. In case the finance company in question has not completed five years of operations, only one percent of the investment amount can be deposited with it. Insurance companies can, however, park money in different finance companies but the amount should not exceed 15 percent of the gross amount allocated for investment. “We asked the company countless times to transfer the amount to commercial banks, but it never complied,” Aryal said. Even as these unethical practices were coming to the fore, the Insurance Board unearthed another case of embezzlement at NB Insurance. This was related to misuse of the ´earmarked fund´ -- which comprises the amounts parked in reserve funds, insurance funds, unexpired risk reserves and outstanding claim reserves. As at the end of fiscal year 2010/11, NB Insurance had around Rs 140 million in ´earmarked funds´. Although the law bars insurance companies from using even a penny from this fund, the regulator detected the flight of around Rs 70 million from the reserves. “We again instructed the company to return the money but as with other instructions this was also disregarded,” Aryal said. Making matters worse, NB Insurance also failed to reimburse Rs 7.5 million issued as credit to board members. The Insurance Board now suspects the company may have even misappropriated around US$108,000 that it was supposed to forward to reinsurance companies. The latter provide cover for risks borne by local insurance companies. If this turns out to be true, people who have bought policies from the company may not be able to get any compensation, as all domestic insurance companies only collect money from clients here but insure goods and assets for customers with reinsurance companies based abroad. nnnn ________________________________________