Court hands down jail terms to United bosses

HETAUDA, JUN 08 -

The Appellate Court Hetauda on Wednesday sentenced the former chairman, director and manager of United Development Bank based in Jitpur, Bara to three years in jail each for banking fraud.

A joint bench of judges Ananda Mohan Bhattarai and Bam Kumar Shrestha handed down the prison sentences against former bank chairman Rabindra Bahadur Singh, director Radha Krishna Amatya and manager Rakesh Raj Shrestha.

The court also ruled that Rs 67.5 million be recovered from Singh for losses caused to the bank besides slapping him with a fine of equal amount. The court has also ordered Amatya to pay a fine of Rs 67.5 million.

The police had arrested Singh and Amatya on May 31, 2011 after their scam pushed the development bank into a crisis. Nepal Rastra Bank (NRB) had declared the bank crisis-ridden twice in four years before they were arrested. The central bank had charged Singh and Amatya of misappropriating Rs 276.21 million and Rs 67.5 million respectively. According to the central bank, Singh misappropriated Rs 67.5 million that was in the bank’s call in advance account without keeping books of accounts. After withdrawing Rs 66.2 million from the account, he converted the non-existent amount into share capital through a decision of the board.

Similarly, Singh took Rs 14 million in advance without disclosing any purpose. He issued credit worth Rs 58.28 million by creating fake borrowers to hide the misappropriated amount, and rescheduled loans worth Rs 46.21 million taken by the bank’s directors against NRB’s directive, according to the central bank. Meanwhile, Amatya was convicted of misappropriating funds lying in the bank’s call in advance without maintaining books of accounts.

Source: The Kathmandu Post