Controversy Erupts Over NEPSE CEO Selection: Allegations of Illegality and Procedural Irregularities

The Nepal Stock Exchange (NEPSE), a cornerstone of Nepal's capital market, is currently embroiled in a significant controversy surrounding the selection process for its new Chief Executive Officer (CEO). Allegations have surfaced, suggesting that the application notice issued by the Ministry of Finance on Shrawan 12, 2083 (approximately July 27, 2026, based on the Nepali calendar) for the CEO position is fraught with irregularities and potentially illegal. This situation raises serious concerns about transparency, good governance, and the integrity of appointments to critical public institutions.

Sources indicate that the selection criteria for the NEPSE CEO position were allegedly tailored to favor a specific individual even before the official application notice was published. The application period, which spanned 15 days and concluded on Shrawan 26, 2083, has been criticized for its lack of transparency. To date, neither the total number of applications received nor the names of the applicants have been publicly disclosed, fueling suspicions of a pre-determined outcome.

A central point of contention lies in the alleged deviation from established government norms. The selection committee is accused of creating a selection procedure that contradicts the "Standards for Appointment and Nomination of Officials and Members of Public Bodies Affiliated with the Ministry of Finance, 2073 (with amendments)" (Maapadanda, 2073). This document, approved by the Nepal Government (Council of Ministers), serves as the official guideline for such appointments, clearly outlining qualifications, disqualifications, tenure, and vacancy conditions.

Specifically, Section 7, Sub-section 2 of Maapadanda, 2073, mandates that for the appointment or nomination of an executive chief of a public body, the ministry must develop a separate procedure based on open competition. This procedure is intended to define operational aspects such as application forms, fees, notice formats, and evaluation methods. Crucially, it is not meant to alter the fundamental educational qualifications and work experience requirements explicitly stated in the primary Maapadanda, 2073.

However, the "NEPSE Executive Officer Selection and Recommendation Procedure, 2083" (Procedure 2083), formulated by the Ministry of Finance for the current CEO selection, appears to have significantly distorted these core requirements. Maapadanda, 2073, stipulates that a candidate for an executive chief position must hold a Master's degree and possess at least five years of experience in the relevant field. In stark contrast, Procedure 2083 demands a minimum of seven years of experience, including managerial level, and an overall work experience of at least 15 years.

Furthermore, Procedure 2083 introduces an unusually restrictive definition of "managerial level," limiting eligibility to government officers up to the second-class rank or individuals holding executive chief positions or those within two levels below the executive chief in a company or organized institution. Critics argue that this narrow definition, coupled with the inflated experience requirement, is a blatant misuse of authority. They contend that Section 7, Sub-section 2 of Maapadanda, 2073, only grants the power to define the selection process, not to unilaterally modify the fundamental qualifications approved by the Cabinet.

This discrepancy raises serious questions about the legality and ethical foundation of the current selection process. Legal experts emphasize that a procedure drafted by a ministry cannot supersede or contradict a standard approved by the Council of Ministers. The fundamental legal principle that any change to government-approved standards must itself be approved by the government appears to have been disregarded. The move to increase the experience requirement from five years to fifteen years, and to introduce a highly specific definition of managerial experience, is widely perceived as an attempt to drastically narrow the pool of eligible candidates, potentially to favor a select few.

There are concerns that this approach might be an attempt to recruit government employees into a professional institution like NEPSE, which requires specialized expertise in capital markets. Such actions, if proven, would undermine the professionalism and independence of NEPSE, potentially impacting investor confidence and market efficiency. The allegations suggest that these irregular provisions were deliberately inserted to make only certain individuals eligible, serving specific interests rather than ensuring the best candidate is selected through a fair and open process.

The current government, which has often criticized previous administrations for flouting rules and procedures to appoint favored individuals, is now facing similar accusations. Legal scholars warn that any appointment made under this allegedly flawed procedure could be challenged in court and potentially nullified in the future. This would not only cause further instability at NEPSE but also damage the credibility of the Ministry of Finance and the government itself.

It is imperative for the government to take immediate corrective action, rectify these procedural shortcomings, and initiate a new, transparent, and legally sound process for the appointment of NEPSE's Chief Executive Officer. Upholding the rule of law and ensuring fair competition in the selection of leaders for vital national institutions is paramount for maintaining public trust and fostering a healthy financial ecosystem.