Title: Nepal’s Cooperative Scandal: Over 71 Billion NPR in Savings Embezzled
Kathmandu – A special audit committee has uncovered a massive financial scandal involving 40 cooperatives in Nepal, where approximately 71 billion Nepalese Rupees (NPR) have been embezzled from savers. The cooperatives in question include well-known entities such as Suprim, Sahara, Suryadarshan, Samanata, Swarnalakshmi, and Small Payala.
According to the committee’s public report released on Friday, these cooperatives were unable to return 6.32 billion NPR in savings to their members. The audit found that these institutions, which had a total share capital of 3.81 billion NPR and assets worth approximately 13 billion NPR, had deposited around 2 billion NPR in banks and financial institutions. They had also distributed loans worth 53.78 billion NPR.
The audit committee categorized three of these cooperatives as problematic, with the public raising questions about their operations. The cooperatives failed to return the deposited savings, with 65.54 million NPR funneled into the Gorhka Media Network, according to the committee’s findings.
The committee recommended legal action against key figures from these cooperatives, including the chairman of Gorhka Media, Mr. Gitendrababu Rai, the managing director, and the company’s operators. While Mr. Rai is currently at large, one of the operators is in jail in Pokhara, and the investigation against another was obstructed when he became the Home Minister.
Despite the police rejecting the claims of the depositors and the public, and the Central Investigation Bureau (CIB) concealing its investigation report, the audit committee has included the CIB’s findings in its final report.
The report highlights how funds were regularly funneled from these cooperatives to Gorhka Media Network without the knowledge of many, including the company’s operators who claimed they were unaware of the source of the funds. The legal responsibility of the company’s directors regarding the source of the funds will be determined based on existing laws.
The government has declared 22 of these cooperatives as problematic, with 42.81 billion NPR in savings yet to be returned to depositors. The report suggests that if the loans taken by individuals from these cooperatives, amounting to up to 1.35 billion NPR, are recovered, some of the issues could be resolved. It also notes that some individuals have served as chairmen of these cooperatives for 20-25 years.
This scandal has sent shockwaves through the financial sector in Nepal, raising questions about the accountability and regulatory oversight of cooperative institutions in the country.
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