After repeated failed attempts to turn it around and pouring in billions of rupees over the years to keep it afloat, the government has finally decided to cut the lifeline of National Trading Ltd, THT report. Stating that NTL had been incurring losses since many years and was only drilling a bigger hole in state coffers, the government had also introduced the ‘voluntary retirement’ scheme for NTL employees a couple of months ago, hinting at the possibilities of either liquidating or changing the entire management of the entity. With its balance sheet spattered in red since the last one decade, NTL has outstanding loans amounting to a whopping Rs 1.4 billion that it owes to the government and financial institutions. “All 264 staffers opted for the Voluntary Retirement Scheme of the government and their applications have been approved,” Laba Raj Joshi, general manager of NTL, said, adding that NTL subsequently stopped all trading and business activities last week. According to Joshi, the earlier managements of NTL had engaged in such large scale irregularities that the entity was unable to make a turnaround despite several noteworthy attempts made by the current management and the government. Even though it has been confirmed that NTL will no longer operate under the current management and format, the government remains undecided about the final fate of the enterprise. MoS Secretary Prem Kumar Rai said VRS was introduced at NTL, as the enterprise had stopped being commercially viable many years ago and the government had to bear huge financial losses in just covering the operational cost of NTL. “We have formed a committee to study the prospects of re-operating NTL in a newer format and ways to make the entity commercially viable,” Rai said, but he hinted at the possibility of shutting the enterprise if its revival would not yield any benefits. Getting a new management to take over the enterprise could be quite challenging, though, as the financially handicapped NTL still needs to clear Rs 1.4 billion in dues to the government and financial institutions and would need to cough up Rs 1.6 billion for its staffers under VRS. NTL was established as a public limited company in March 1962 to channelise commodity aids from China and what was then the Soviet Union to meet the local cost of development projects initiated by these countries through the sale of aid goods in the domestic market. In order to create a better channel to serve the growing needs of the national economy and the people at large through a regular supply of essential goods at reasonable prices, the government later set up the NTL as a state trading organisation. But years of inefficient management and scandals that surfaced over the years have tarnished the reputation of the state enterprise. The budget of 2016-17 had announced that loss-making public enterprises, including NTL, Nepal Food Corporation, Agriculture Input Company and Timber Corporation of Nepal, would be merged to form a national supply company. However, former finance secretary Rameshwor Khanal opined that NTL should be shut, as domestic private sector had wholly taken over the export-import responsibility that NTL had been assigned during its establishment.
Nepal govt to shut down National Trading Ltd