Nepal's ex-Home Minister Lamichhane appears in Kathmandu Court as investigation into cooperative fraud heats up

Lamichhane, who was released on bail on Thursday after 84 days in custody, arrived at the court in his own vehicle and waved at the media as he walked into the court without making any comments.

The founder of Rastriya Swatantra Party (RSP), Lamichhane was released on bail by the Kaski District Court on Thursday in a separate fraud case involving the Suryadarshan Cooperative, arrived in Kathmandu late on Friday evening. The court had ordered his release on a bail amount of Nepalese Rupee 6.5 million after 84 days in custody.

On January 5, the Kathmandu District Government Attorney's Office, based on police investigations, registered the case against Lamichhane and 38 others at the Kathmandu court.

The accused include former board members of Gorkha Media Pvt Ltd and key officials of the Swarnalaxmi Cooperative. Among them are former vice chair Chhabilal Joshi, chair Gitendra Babu (GB) Rai, vice chair Devendra Babu Rai, treasurer Kumar Ramtel, secretary Iran Lama, joint secretary Kabita Tamang, and members Hemant Adhikari, Rabina Rimal, and former chair Deepak Lama. They are accused of misappropriating funds amounting to Nepalese Rupee 1.199 billion.

Also, former treasurer Sabina Alemagar, members Bhakta Bahadur Bholan, Sabita Lama, former Secretary Pradeep Lama, accounts coordinator Ganeshraj Shrestha, and former committee members Kalpana Kumari Shrestha and Raju Baral, among others, have been chargesheeted in the case.

The charges include allegations of cooperative fraud and organised financial crimes. The police investigation suggests the funds were systematically mismanaged and diverted, prompting legal action against 39 individuals.

Cases of embezzlement have been filed in Kaski (Suryadarshan Cooperative), Butwal (Supreme Cooperative), Chitwan (Sahara Cooperative), Kathmandu (Swarnalaxmi Cooperative) and Parsa (Sano Paila Cooperative). In all of the district, Lamichhane has been accused of diverting deposits to Gorkha Media Network which ran the now-defunct Galaxy 4K Television.

Lamichhane was arrested from his party office in Kathmandu on October 18, 2024, by a team from the Central Investigation Bureau on charges of organized crime and misappropriation of cooperative funds.

The former Home Minister and founder of RSP, the fourth largest party in the parliament has denied the charges of charges of money laundering, cooperative fraud, and organized crime in his statement to the Kaski District Police.

In the year 2024, a special inquiry by a parliamentary committee formed to investigate the cooperative scam which had prepared and tabled a report in the parliament on September 16, 2024, indicted Lamichhane in embezzlement of millions of rupees as a part of the cooperative scam.

The seven-member committee formed on May 28 last year was tabled on the parliament which was formally endorsed by the house session. The report concluded that millions of rupees injected to Gorkha Media came from cooperatives which were traded on the basis of forged documents.

Lamichhane had worked in Gorkha Media, the parent company of now-defunct Galaxy 4K Television, as managing director at the time when cooperative savings were invested in violating cooperative legislation. The incumbent parliamentarian also clarified that he was engaged in Gorkha Media taking sweat share.

Lamichhane later in the year 2022 entered politics announcing the formation of the Rastriya Swatantra Party and entered the federal parliament as a parliamentarian contesting the election the same year. The television's failure to pay salaries to its staff shut its formal operation last year.

The committee in its report also recommended the government take legal action against everyone involved in the transfer of money to Gorkha Media from various cooperatives. Millions of rupees were inducted into Gorkha Media from various cooperatives Suryadarshan from Pokhara, Supreme from Butwal, Swarnalaxmi from Kathmandu, Sahara Chitwan from Chitwan and Sanopaila from Birgunj.

The report has stated that the embezzlement of amounts was completed with the active involvement of GB Rai, Kumar Ramtel, Rabi Lamichhane (then managing director), and Chhabi Lal Joshi. Rai and Lamichhane had operated a joint account in a bank and had issued cheques amounting to millions which shows his involvement, the committee report includes.

"Every company has its own objective and spirit. Promoters and shareholders are the ones with main responsibilities in such institutions. Those in the role and responsibility as shareholders, promoters and managing director cannot be allowed to not be responsible and accountable for the money received by the company," the report stressed.

During the investigation, the committee also held an inquiry session with former Home Minister and incumbent Chairperson of Rastriya Swatantra Party (RSP) Lamichhane for over 10 hours. Throughout the inquiry session, he claimed to be unaware that the transfers that were made to the Gorkha Media originated from cooperatives, that too savings of about 50, 000 people.

Further arguing over the case, Lamichhane also claimed that Rabi Lamichhane who had borrowed money from Suryadarshan and Supreme Cooperatives also to be someone not in his knowledge. The committee had asked him a set of 50 questions about his alleged involvement in the scam.

Following the tabling and endorsement of the report, House Speaker Devraj Ghimire directed the government to implement the report of the parliamentary special inquiry committee formed to investigate the misappropriation of savings of cooperatives. Speaker Ghimire then directed the Parliament Secretariat to send the report to the government for implementation.

The HoR had formed the committee headed by CPN-UML lawmaker Thapa on May 28, 2024, after Nepali Congress demanded the formation of a parliamentary investigation committee saying Rastriya Swatantra Party President Rabi Lamichhane, who was then deputy prime minister and home minister, was involved in the misappropriation of cooperative savings. The HoR had initially given the committee three months and later extended its tenure by 15 days.

Dilendra Badu of Nepali Congress, Ishwari Neupane, Sabitra Bhusal of UML, Lekhnath Dahal of CPN (Maoist Center), Shishir Khanal of RSP, and Dhruba Bahadur Pradhan of Rastriya Prajatantra Party were members of the parliamentary committee. (ANI)