Things getting hotter for Shrestha and co

KATHMANDU, JAN 30 -

Key officials of the NB Group including managing director Laxmi Bahadur Shrestha face possible arrest on banking fraud charges as evidence against them has been mounting. Nepal Rastra Bank (NRB) has recently submitted further details regarding the irregularities committed by them to the police.

Shrestha, who has been accused of banking fraud at Nepal Sri Lanka Merchant Bank (NSMB) and is wanted by the police, has managed to stay out of custody allegedly due to strong political protection. The police have already filed cases against him, his family members and relatives and former NSMB officials for banking offences. Shrestha has not been directly charged in the scam at NSMB. According to a central bank source, it has provided details about his misdeeds in other financial institutions.

“We have sent a letter to the police mentioning the irregularities committed by Shrestha and his family members by taking loans through third parties such as their employees and other people,” said the central bank source. The source added that they had borrowed Rs 200 million to Rs 250 million, and the amount due would be double that if interest were to be added. “But he and his family members have failed to repay those loans,” added the source.

The Bank and Financial Institution Act forbids promoters, bank directors and promoters with a share of more than 1 percent from taking loans from their own company. “The money taken as loans has been found to have been spent on buying shares, personal expenses and sharing with others,” said the NRB source.

The source said the additional evidence would help the police to build a stronger case against Shrestha. He has been charged with banking offence after former NSMB directors in custody told the police that they had acted as per his instructions. The police have arrested former NSMB executive chairman Rubi Joshi and former directors Sri Ram Prasad Lamichhane and Gaurishankar Chaudhary.

NSMB had provided loans worth Rs 353.1 million illegally as it was about to be merged with Nepal Bangladesh Bank (NBB) about two years ago. As a result, NBB suffer a huge financial burden after merging with a cash-strapped NSMB.

The police launched a manhunt for Shrestha after the arrested bank officials named him as the key architect of the scam, but they have not been able to trace his whereabouts. The police have been under greater pressure to arrest Shrestha since the central bank’s letter reached the Central Investigation Bureau (CIB).

“We have heard that Shrestha has been asking the government prosecutor to create an environment to repay the loans,” said an NRB official.

Shrestha was charged years ago, however, no action has been taken against him due to protection from political circles and the NRB board despite his irregularities being an open secret. The board members of the central bank who have been protecting him have already left. “We have heard that he has been making noises that the central bank has been harassing him,” said the NRB source.

The police have filed cases against Shrestha and his family members and relatives including Purna Bahadur Shrestha, Jen Shrestha, Gita Shrestha, Mukunda Acharya, Elija Vaidya and others based on the statements given by those who have been arrested on the charge of committing irregularities at NSMB.

Source: The Kathmandu Post