September 18, 2024
KATHMANDU – The parliamentary special probe committee formed to investigate crisis-ridden cooperatives has concluded that Rabi Lamichhane, the chairman of the Rastriya Swatantra Party (RSP), was involved in misusing millions of rupees received from cooperatives when he was the managing director of the now defunct Gorkha Media Network.
The committee’s report recommends that the government take action against former deputy prime minister and home minister Lamichhane for the act.
Lamichhane was accused of diverting funds from multiple cooperatives to run the media company that operated the Galaxy 4K Television channel, which ceased operations last year. Chairman GB (Gitendra Babu) Rai and managing director Lamichhane co-founded and jointly ran the media company before Lamichhane joined politics in June 2022.
“During our investigation, we found that the investment in the Gorkha Media Network had been made with the money diverted from various cooperatives,” Ishwari Devi Neupane, a Nepali Congress member of the probe committee, told the Post. “Although Lamichhane has been found guilty of using funds from cooperatives for Gorkha Media Network, it could not directly link him to the rerouting of cooperative funds.”
Lamichhane has consistently denied any involvement in the misappropriation of cooperative funds. However, the report of the parliamentary special committee formed to investigate crisis-ridden cooperatives has concluded that Rs650 million from five credit cooperatives, including the Pokhara-based Surya Darshan Cooperative, Butwal-based Supreme Cooperatives, Chitwan-based Sahara Cooperatives, Birgunj-based Sano Paila Cooperatives, and Kathmandu-based Swarnalaxmi Cooperatives, were diverted to the Gorkha Media Network.
The committee’s report, which was submitted to Speaker Devraj Ghimire at a meeting of the House of Representatives on Monday, recommends prosecuting four individuals, including Lamichhane, the then managing director of Gorkha Media Network; chairman Gitendra Babu (GB) Rai; a board member Kumar Ramtel; and initial founder Chhabi Lal Joshi.
“Those in the roles of shareholders, board members and managing director can’t evade accountability and liability for the money that comes into the company,” reads the report submitted by the chair of the probe panel, CPN-UML lawmaker Surya Thapa.
It states that the bank account holders who operate the account should be responsible for how the money in that account is used. “Since Rai, Ramtel, Lamichhane and Joshi are seen to be using the money that came into the company from various cooperatives, we recommend that the Nepal government prosecute them in accordance with the prevailing laws,” the report further says. An Interpol diffusion notice has been issued against Rai, who has been on the run and is believed to be abroad. Ramtel is in judicial custody.
The probe panel has also recommended that the government make binding legal arrangements for the payment for share purchases and sales.
The report also suggests that the government make proper legal arrangements concerning sweat shares and prompt relevant agencies to address the matter.
Lamichhane claimed to have held 15 percent of sweat shares in the company, which he said he sold after completing all legal procedures. However, the committee’s investigation found those claims to be false.
“Forgery was involved in the purchase and sale of sweat shares,” Lekhnath Dahal, the CPN (Maoist Centre) lawmaker and committee member, told the Post.
The report states that the office bearers of the media company had used forged documents while transferring the company’s shares, and recommends that the government carry out further investigation of the matter and take necessary actions.
However, RSP leaders had their own interpretation of the probe committee’s report.
RSP chair Lamichhane and Vice-chair Swarnim Wagle, while leaving the House meeting, claimed that the committee had acquitted Lamichhane of the allegations that he was involved in embezzlement of cooperative funds. They said they welcome the committee’s report, and noted that Shishir Khanal, the RSP member in the committee, did not even write a note of dissent “as the report had exonerated the party chair”.
RSP leaders also claimed that the accusations from other parties had been proved false.
Manish Jha, acting spokesperson of the RSP, said that even Congress General Secretary Gagan Thapa had claimed that Lamichhane was directly involved in diverting cooperative funds to the media company using his own signature. Jha claimed that the report disproves this accusation. “We had acknowledged that Gorkha Media Network had diverted the cooperative funds for its operation, which the report confirms,” he added.
“We had assumed the report might do great damage to our party, but we are pleased how it has been presented,” Jha told the Post. “Things will become clearer after the full report is made public.”
But committee members don’t agree with the RSP leaders’ interpretation. “They may have assumed that their party chair would be directly implicated, but that did not happen,” said Dhruba Bahadur Pradhan, a Rastriya Prajantra Party (RPP) lawmaker and committee member.
He said that not being directly implicated does not mean that he was not involved in the scam. “Our law does not permit the rerouting of the cooperative funds to a private company, yet Lamichhane and the company did exactly that. He can be prosecuted for this,” Pradhan, who is also a former chief of Nepal Police, told the Post.
Legal experts say that Lamichhane could face prosecution under four different laws based on the findings of the parliamentary special inquiry committee’s report.
“Lamichhane could be charged the cooperative fraud case under the Cooperative Act, fraud and duping under the National Penal Code, organised crime cases under the Organised Crime Prevention Act and money laundering case under the Prevention of Money Laundering Act,” advocate Om Parkash Aryal told the Post.
The committee was formed on May 28 and had four-point terms of reference to investigate cooperative funds embezzlement. Among the four-point ToR, the cooperatives linked with the funding of the now-defunct Gorkha Media Network will also be probed.
The probe panel had three months to complete its work from the first day of the committee meeting which was held a week later after the committee’s formation. When the committee could not complete its task in the given time, Parliament had extended the term by 15 days, to September 22. But the committee has submitted its report before the expiry of the extended time.
Speaker Devraj Ghimire forwarded the report to the government for implementation after committee chair Thapa submitted it to the House of Representatives on Monday.
The lower house formed the special inquiry committee after the erstwhile main opposition party Nepali Congress obstructed House meetings continuously for weeks demanding the formation of such a panel.
The Congress, along with the RPP, demanded a parliamentary special probe committee to investigate the cooperative embezzlement, claiming involvement of the then deputy prime minister and home minister Lamichhane. The then ruling parties the CPN (Maoist Centre), the major coalition partners UML and Lamichhne’s RSP were against the demand.
Lamichhane, host of a popular television show, founded the RSP in June 2022. RSP is the fourth largest party in Parliament with 21 lawmakers (including deputy speaker).
He is linked with multiple controversies. His case regarding the use of dual passports is sub judice. He was also stripped of his position as a lawmaker and minister for home affairs in early 2023 after he was found guilty of contesting the 2022 election without proper Nepali citizenship.
Lamichhane had obtained an American green card, but contested the election in Chitwan-2 without first re-acquiring Nepali citizenship. He won by a huge margin. Lamichhane, who had been stripped of the lawmaker position on charges of using dual citizenship, got reelected as the lawmaker from the same constituency in a by-election held in 2023.
Similarly, the parliamentary special probe committee has recommended that the government investigate Jyoti Gurung, former wife of Nepali Congress Vice President and lawmaker Dhan Raj Gurung.
Jyoti Gurung, who was a board member of Miteri Cooperative, is accused of mishandling more than Rs120 million of the cooperative’s funds.
“The Miteri cooperative chairman, Khumbharaj Gurung, had complained to the committee about Dhan Raj Gurung and his wife over their mishandling of the cooperative’s money,” Pradhan said. “So the committee report has recommended further investigation into the Gurungs.”
On Friday, the special committee members visited the Miteri Cooperatives office at Mahalaxmisthan in Lalitpur, to discuss the matter with its chairman.
After being charged with embezzling the cooperative’s funds, Congress Vice President Gurung, speaking in Parliament on September 10, called for a thorough probe to clear his name. Pradhan said the committee found no evidence implicating lawmaker Gurung in the misappropriation.
Cooperatives are considered to be self-regulatory bodies, but in Nepal a large number of cooperatives are being operated arbitrarily by a handful of operators. The committee report also suggests that the government should establish a strong regulatory body to look after the financial aspect of cooperatives.
Apart from chair Thapa the committee had six other members. Sarita Bhusal from the UML; Dilendra Prasad Badu and Ishwari Devi Neupane from the Congress; Lekhnath Dahal from Maoist Centre; Sishir Khanal from RSP and Dhruba Bahadur Pradhan from RPP.