… new management says it has plans to reinvest the revenue earned

Thukten Zangpo  

When community members learnt that their Rangjung Norbu Gongphel Private Limited (RNGPL) is not going to declare dividends to shareholders for the third year in a row, all sorts of rumours began. 

RNGPL is a company formed by the people of the Shumar gewog in Pemagatshel when State Mining Corporation Limited (SMCL) took over the Gypsum mine of Khothakpa in 2019. 

The SMCL hired earth-moving equipment and trucks from RNGPL. The community members raised Nu 36 million with contributions ranging between Nu 1,000 and Nu 500,000. Currently, the company has 1,800 members and seven board members from five chiwogs. 

Since RNGPL’s inception, the company has declared a 15 percent dividend to the members in 2021, costing the company Nu 4.5 million.

A shareholder of the company expressed that the company collected money from the villagers and did not get anything other than a one-time dividend. 

Members have not heard of anything or been told anything, he said. 

“They do not make the financial statement public nor do the villagers know what’s happening, they used to call for annual general meetings,” a member said. “It is supposed to be a broad-based ownership with dividend as returns.”

He said that although their investment is minimal, however, the concern is that even with such well-designed policies, the implementation is flawed. 

Shumar Gup, Sonam Dhendup said that there is some talk among the members that there are some discrepancies related to the funding and non-declaration of dividends. However, the gewog office has not received any formal complaints. 

RNGPL’s Chief Executive Officer, Karma Jamtsho, who has been in office for only three months, said that the company’s revenue is only adequate to meet its operation expenses. 

The company earns a revenue between 6.5 million to Nu 6.8 million every month. Of which Nu 4 million goes to the company for hiring nine earth moving equipment and trucks while Nu 2.8 million is given for the nine private vehicles hired by the company. 

Karma Jamtsho said that Nu 2.5 million to 5 million goes to fuel the earth-moving equipment and trucks. 

The hiring charge for earth moving equipment is Nu 1, 765 per hour, and Nu 1,214 per hour for tipper vehicles for transportation from mining sites to crusher plants.

Karma Jamtsho also said that Nu 5 million is paid every month as an equated monthly instalment to the bank for the purchase of the earth-moving equipment and trucks and there are expenses for the employee’s salary. The company has 23 employees and nine truck drivers hired from the private sector.

“The public has been raising concerns that the company is not declaring the dividends. However, the company has plans to invest with keeping the funds to purchase new machines and as an emergency fund,” he said, adding that the company has also proposed to revise the hiring charges to SMCL. The company has a balance of Nu 5 million in its account. 

An accountant with the RNGPL, Rinzin Dema said that the members want to declare a dividend every year but did not declare dividends because the company has plans for expansion not only in hiring business but also in other investments. “We have been profitable since its inception.”

She said that the company declared a 15 percent dividend to gain public trust in the company. 

SMCL’s Chief Executive Officer, Kezang Jamtsho said that the concept of broad-based ownership was to benefit the community where the RNGPL was awarded the work without quotation and there is a contract drawn between SMCL and RNGPL.