Former Gurkha Dev Bank boss Bamjan in police net
Fri, May 20, 2011 12:00 AM on Others,
KATHMANDU, MAY 20 -
In the first ever case of detention of a top-level banking executive over financial embezzlement, police on Thursday arrested DB Bamjan, former executive chairman of Gurkha Development Bank.
Earlier, the Nepal Rastra Bank (NRB) had tried to take legal against Sita Ram Prasain, former chairman of then Cottage and Small Industry Development Bank, and Uttam Pun, then chairman of Nepal Development Bank. However, they could not be arrested because of weak coordination between the central bank and the police.
Bamjan’s arrest has come almost two months after Nepal Rastra Bank (NRB) declared Gurkha crisis-ridden and decided to freeze all fixed and movable assets and passports of former directors, employees and loanees responsible for the financial crisis in the bank.
Nepal Police’s Central Investigation Bureau (CIB) arrested Bamjan from his residence in New Baneshwor, Kathmandu, following the central bank’s request. The NRB had forwarded names of 15 individuals, including Bamjan, who are blamed for the financial calamity in the institution. According to CIB Chief DIG Rajendra Singh Bhandari, his bureau received a letter three days ago, asking to arrest Bamjan.
The charge sheet says Bamjan, as executive chairman of Gurkha, played a crucial role in sanctioning loans to various companies in violation of the central bank’s credit policy. Bamjan has been charged under the Clauses 7, 8 and 9 of the Banking Offense and Punishment Act. According to the charge sheet, loan worth Rs 124.1 million sanctioned by the then GDB board was used to repay loans of others real estate companies related to the bank and its employees.
Bamjan had awarded loan worth Rs 51.3 million to Madan and Gurung Housing which was 429 percent more than the actual value of the collateral. As per the credit policy, BFIs can only lend 70 percent of the collateral value.
Likewise, Krishi Premura Properties Private Limited was sanctioned loan worth Rs 70 million without any mortgage. Other Gurkha officials and loanees facing charges are Nirmal Gurung, Dhan Prasad Rai, Ramesh Tamang, Mahesh Prasad Rijal, Sanjeev Kumar Mishra, Mina Shrestha, Jeevan Ghimire, Sanjeev Kumar Agrawal, Rakesh Adukia, Prabin Naulakha, Ruchi Jajodiya, Poonam Khetan, Deepak Rana Magar and Rajendra Das Shrestha. They are at large.
Police sources say Adukiya along with his wife has fled to Hong Kong, while Sherstha is in Canada.
The central bank investigation had found a huge amount of financial irregularities by Gurkha directors. It had forwarded a list of 38 cases of big irregularities in Gurkha to the police. According to the central bank, Gurkha directors have taken loans worth more than Rs 500 million although the Bank and Financial Institution Act (BAFIA) bars promoters and directors from taking loans from their own banks.
The then Gurkha board had decided to purchase land belonging to Krishi Premura Holding—a key promoter of the bank—in violation of the BAFIA that prohibits transactions among people having conflict of interest. The board used depositors’ money to purchase the five ropanies of land located in Kamaladi, Kathmandu.
The bank had sought to purchase the land for Rs 900 million, while its actual market price stood at around one-third of the amount. They bank had already paid Rs 300 million as advance. Immediate Gurkha director Nirmal Gurung and Krishi Premura representative Naulakha had signed a deal in which Adukiya was a witness.
According to a Gurkha source, Adukiya also used to get involved in board decisions as an invited representative although people who are not in the board have no rights to intervene in banks’ decisions.
The central bank, in a letter forwarded to the police, has charged Adukiya’s company Nepal Mentha Product Limited of withdrawing Rs 890 million from various banks by putting up same collateral.
Meanwhile, the NRB has also asked the police to arrest Yogendra Prasad Shrestha, former executive chairman of Nepal Share Market and Finance (NSMF), his wife and son. An NRB investigation has found
misappropriation of funds on a huge scale by Shrestha.
Source: Kantipur
In the first ever case of detention of a top-level banking executive over financial embezzlement, police on Thursday arrested DB Bamjan, former executive chairman of Gurkha Development Bank.
Earlier, the Nepal Rastra Bank (NRB) had tried to take legal against Sita Ram Prasain, former chairman of then Cottage and Small Industry Development Bank, and Uttam Pun, then chairman of Nepal Development Bank. However, they could not be arrested because of weak coordination between the central bank and the police.
Bamjan’s arrest has come almost two months after Nepal Rastra Bank (NRB) declared Gurkha crisis-ridden and decided to freeze all fixed and movable assets and passports of former directors, employees and loanees responsible for the financial crisis in the bank.
Nepal Police’s Central Investigation Bureau (CIB) arrested Bamjan from his residence in New Baneshwor, Kathmandu, following the central bank’s request. The NRB had forwarded names of 15 individuals, including Bamjan, who are blamed for the financial calamity in the institution. According to CIB Chief DIG Rajendra Singh Bhandari, his bureau received a letter three days ago, asking to arrest Bamjan.
The charge sheet says Bamjan, as executive chairman of Gurkha, played a crucial role in sanctioning loans to various companies in violation of the central bank’s credit policy. Bamjan has been charged under the Clauses 7, 8 and 9 of the Banking Offense and Punishment Act. According to the charge sheet, loan worth Rs 124.1 million sanctioned by the then GDB board was used to repay loans of others real estate companies related to the bank and its employees.
Bamjan had awarded loan worth Rs 51.3 million to Madan and Gurung Housing which was 429 percent more than the actual value of the collateral. As per the credit policy, BFIs can only lend 70 percent of the collateral value.
Likewise, Krishi Premura Properties Private Limited was sanctioned loan worth Rs 70 million without any mortgage. Other Gurkha officials and loanees facing charges are Nirmal Gurung, Dhan Prasad Rai, Ramesh Tamang, Mahesh Prasad Rijal, Sanjeev Kumar Mishra, Mina Shrestha, Jeevan Ghimire, Sanjeev Kumar Agrawal, Rakesh Adukia, Prabin Naulakha, Ruchi Jajodiya, Poonam Khetan, Deepak Rana Magar and Rajendra Das Shrestha. They are at large.
Police sources say Adukiya along with his wife has fled to Hong Kong, while Sherstha is in Canada.
The central bank investigation had found a huge amount of financial irregularities by Gurkha directors. It had forwarded a list of 38 cases of big irregularities in Gurkha to the police. According to the central bank, Gurkha directors have taken loans worth more than Rs 500 million although the Bank and Financial Institution Act (BAFIA) bars promoters and directors from taking loans from their own banks.
The then Gurkha board had decided to purchase land belonging to Krishi Premura Holding—a key promoter of the bank—in violation of the BAFIA that prohibits transactions among people having conflict of interest. The board used depositors’ money to purchase the five ropanies of land located in Kamaladi, Kathmandu.
The bank had sought to purchase the land for Rs 900 million, while its actual market price stood at around one-third of the amount. They bank had already paid Rs 300 million as advance. Immediate Gurkha director Nirmal Gurung and Krishi Premura representative Naulakha had signed a deal in which Adukiya was a witness.
According to a Gurkha source, Adukiya also used to get involved in board decisions as an invited representative although people who are not in the board have no rights to intervene in banks’ decisions.
The central bank, in a letter forwarded to the police, has charged Adukiya’s company Nepal Mentha Product Limited of withdrawing Rs 890 million from various banks by putting up same collateral.
Meanwhile, the NRB has also asked the police to arrest Yogendra Prasad Shrestha, former executive chairman of Nepal Share Market and Finance (NSMF), his wife and son. An NRB investigation has found
misappropriation of funds on a huge scale by Shrestha.
Source: Kantipur
