Nepal’s Finance minister resigns after public outcry and probe panel

The resignation came weeks after allegations that he allowed two people to tweak tax rates a day before he presented the budget.

Binod Ghimire

Binod Ghimire

The Kathmandu Post


Finance Minister Janardan Sharma had been defiant despite growing calls for his resignation. Elite Joshi/TKP

July 7, 2022

KATHMANDU – Finance Minister Janardan Sharma resigned on Wednesday, weeks after allegations that he allowed two unauthorised persons to tweak tax rates on May 28, a day before he presented the national budget in Parliament.

There was public outcry and widespread criticism after Annapurna Post, a vernacular daily, on June 20 reported that Sharma had directed the officials at his ministry to follow suggestions of the two individuals in changing tax rates.

However, he had rubbished the allegations, claiming that he hadn’t done anything wrong.

Sharma has been charged with breaching the budgetary discipline, which experts say amounts to financial crime.

He announced his resignation in an address to the House of Representatives on Wednesday soon after an 11-member parliamentary committee was announced to probe the charges against him.

Pressure was building on Sharma to resign after the Finance Ministry said that the CCTV footage of the night of May 28 got erased as the system could store only 13 days of recording. It was viewed as Sharma’s attempt to destroy the evidence.

Political parties earlier on Wednesday deliberated on forming a parliamentary probe committee, a demand by the main opposition CPN-UML, for the last few weeks. On Tuesday, Nepali Congress President and Prime Minister Sher Bahadur Deuba and CPN (Maoist Centre) chair Pushpa Kamal Dahal also discussed the controversy surrounding Sharma.

Sharma represents the Maoist Centre.

Soon after the probe committee was formed, Sharma was allowed to address the House. The UML, however, objected to it, saying its lawmakers would boycott the meeting if he was allowed to speak in the capacity of finance minister.

As Sharma proceeded towards the rostrum, UML lawmakers walked out of the chamber.

While addressing the House, Sharma said that he had not done anything wrong.

“While I completely refute the allegations against me, I have decided to cooperate in the investigation,” said Sharma. “I announce my resignation to facilitate the probe process.”

Sharma has been embroiled in a series of controversies ever since he took the charge of the Finance Ministry on July 14 last year. In the latest one, he was accused of inviting two unauthorised persons to the ministry to change tax rates and deleting the CCTV footage.

In his 10-minute address, Sharma said a fabricated story was brought to the public domain to defame him. He also claimed that only authorised persons—secretaries, joint secretaries and director generals from the Department of Customs and the Department of Revenue—were involved in finalising the budget on the eve of the budget day.

“Such parliamentary committees were formed in the past also to investigate different allegations against former finance ministers. But they never resigned,” he said. “I can face 1,000 other investigations because I haven’t done anything wrong.”

The probe committee formed earlier in the day consists of four lawmakers from the UML, two each from the Nepali Congress and the Maoist Centre, and one each from the CPN (Unified Socialist), Janata Samajbadi Party and Loktantrik Samajbadi Party.

Khagaraj Adhikari (UML), Dev Gurung (Maoist Centre), Pushpa Bhusal (Congress), Pradeep Gyawali (UML), Bhanubhakta Dhakal (UML), Bimala BK (UML), Laxman Lal Karna (Loktantrik Samajbadi Party), Shakti Basnet (Maoist Centre), Sarala Kumari Yadav (Unified Socialist), Sitaram Yadav (Congress) and Surendra Yadav (Janata Samajbadi Party) are the members of the committee.

The UML had maintained that Sharma had no moral right to address the House in the capacity of a minister.

“We are against the decision of the Speaker to allow Sharma to address the House as a minister. He can only address as a lawmaker,” said UML lawmaker Yogesh Bhattarai while addressing the House earlier in the day. “Allegations against him have already been proved. The probe committee will only recommend actions against him.”

This is the third parliamentary probe committee since 2011 formed to investigate allegations related to budget wrongdoings by unauthorised persons and leaking the budget before it was presented in the House.

In July 2011, then finance minister Bharat Mohan Adhikari was accused of allowing unauthorised persons to tweak tax rates while leaking the budget.

A parliamentary probe committee led by Laxman Ghimire, then Nepali Congress chief whip, was formed to investigate the allegations.

“Then prime minister Jhala Nath Khanal and Maoist chair Dahal were aware of whatever had happened in the ministry,” Ghimire, who is currently in Australia, told the Post over the phone. “Most of our recommendations were not implemented though I cannot exactly recall what they were.”

Ramesh Lekhak, a Congress leader who was a member of the panel, said they had recommended a warning to the then finance minister and then secretary.

He, however, could not recall what exactly happened. Rameshore Khanal, who was finance secretary then, had resigned expressing reservations about the way Adhikari had prepared the budget.

Another parliamentary committee was formed in May 2016 when the national budget was leaked to national newspapers before it was presented in Parliament. An eight-member committee led by Lekhak was formed to probe the matter. Bishnu Poudel was finance minister.

“We had made several recommendations to maintain the secrecy of the budget,” Lekhak told the Post. “The present situation wouldn’t have arisen had our earlier reports and recommendations been followed strictly. However, I still believe a parliamentary probe is necessary to dig out the truth.”

Lekhak said that a parliamentary panel should have been constituted soon after the controversy erupted.

The probe committee formed on Wednesday has 10 days from the day it commences its work to submit its report.

Meanwhile on Wednesday, Finance Secretary Madhu Marasini went on an extended leave.

Marasini, Revenue Secretary Krishna Hari Pushkar and two joint secretaries Bhupal Baral and Chakra Bahadur Budha were said to be at the Finance Ministry on the night of May 28, the day before the budget presentation, when Sharma invited the two outsiders.

Marasini has not said anything despite the Post’s repeated attempts to learn from him about the alleged incident on the night of May 28.

Two officials at the Finance Ministry told the Post on Wednesday morning that Marasini decided to go on leave saying he won’t return as long as Sharma remains finance minister. Marasini could not be reached for comments after Sharma’s resignation.

Sharma, a former Maoist commander, has been a controversial figure. On November 19, 2010, he was at the forefront to block the budget when Surendra Pandey of the UML was set to present it in Parliament. A scuffle ensued as Sharma accosted Pandey when he was proceeding towards the rostrum. The budget briefcase got torn apart.

A member of the probe committee said they would start work as per the mandate.

“Our terms of reference are clear,” Dhakal, a member of the probe committee representing the UML, told the Post. “We will dig out the facts while also recommending action if [Sharma is] found guilty.”

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