Supreme Court orders Basnet back into custody

KATHMANDU, AUG 23 -

The Supreme Court has ruled that disgraced promoter of Oriental Cooperative Sudhir Basnet should be kept in custody overturning the Patan Appellate Court’s decision to release him. A division bench of justices Girish Chandra Lal and Devendra Gopal Shrestha handed down the verdict on Friday.

In August 2013, the Appellate Court had upheld the decision of the Kathmandu District Court to release Basnet on bail. Judge Bhoj Raj Adhikari of the District Court had released Basnet on bail totalling Rs 600,000, Rs 400,000 for a case related to alleged fraud of Rs 80 million and Rs 200,000 for another charge related to a Rs 40-million fraud.

The police had arrested Basnet following charges of not paying interest on bank loans, repaying depositors of Oriental Cooperative and ensuring availability of apartments which had been booked in his housing projects.

Basnet’s woes began when his entire business was affected due to a recession in the realty sector triggered by Nepal Rastra Bank’s cap on the realty business. He had been under mounting pressure from Oriental’s depositor to pay back their money. He was also being pressurized by home buyers after he failed to deliver the homes on time.

Similarly, several of Basnet’s cheques had bounced. After his failure to clear his liabilities, the prosecutor had filed a case against him. Basnet has promoted about two dozen housing and apartment projects, most of which have not been completed. After banks refused to provide more loans, he failed to complete the projects which led to irate customers moving against him.

Oriental Cooperative has not been able to repay its depositors after Basnet sank their savings in his realty projects. He had taken loans from the cooperative to fund his projects.

A high-level probe panel formed eight months ago has collected a large number complaints against Basnet. The committee led by former chairman of the Special Court Gauri Bahadur Karki received 12,778 complaints against troubled cooperatives, 11,286 of which were against Oriental.

And of the more than Rs 9.63 billion in liabilities of 130 troubled cooperatives, Oriental alone has liabilities worth more than Rs 6

billion.

As per the panel’s report, Basnet owes Rs 5.50 billion to Oriental’s depositors. In addition, he has been charged with misappropriating Rs 1.36 billion that he collected from those who booked houses and apartments in his projects.

Source: The Kathmandu Post