Khatri, Maratha held for banking fraud

KATHMANDU, JUN 04

The Central Bureau of Investigation arrested Nawaraj Khatri, 35, who had been convicted of banking fraud by the Appellate Court, Patan on May 12, 2014, from Baniyatar on Tuesday.

He was brought to the Kathmandu District Court on Wednesday.

The Appellate Court had sentenced him to three years’ imprisonment and ordered a fine of Rs65 million. Khatri, the proprietor of New Saujanya Hardware, was convicted of misusing a Rs65 million business loan taken from Capital Merchant and Finance Company. Khatri lives in Dhapasi.

Likewise, on May 28, the police arrested Arun Kumar Maratha who has been convicted of banking fraud at the same finance company, the police said in a statement. Maratha has been sentenced to six years in jail and ordered to pay a fine of Rs133 million.

The linchpin of the scam, former managing director Pawan Karki, fled to the US after embezzling Rs2.5 billion. The government has presented an extradition request to the US government through the Nepal Embassy.

The US government has sent a formal letter to the Nepal government stating that since there is no extradition treaty between the two countries, there is no legal ground to extradite anyone staying in the US legally. Karki had taken the loan by creating fake borrowers.

Capital Merchant was thrown into crisis as a result of the embezzlement of its deposits. Its net worth turned negative by Rs1.53 billion and its non-performing loans stood at 73.31 percent, prompting Nepal Rastra Bank to declare it crisis-ridden.

Source: The Kathmandu Post