Kathmandu [Nepal], August 11 : A district court in Nepal ordered former Deputy Prime Minister and Home Minister Rabi Lamichhane to remain in judicial custody, rejecting his application for release on cooperative fraud.
The Rupandehi District Court late on Monday evening hearing over the application filed by Lamichhane, also the founder of Rastriya Swatantra Party (RSP) upheld the judicial custody.
A single bench of Judge Narayan Prasad Sapkota refused to let Lamichhane out, though he had submitted an application for release in connection with the Butwan-based Supreme Saving and Credit Cooperative fraud case.
"Since the amount of money owed to him has not been determined, and the process of examining witnesses and other evidence in the case is still pending, and since the documents attached to the file do not show that the petitioner is in compliance with Section 71 of the Code of Criminal Procedure, 2074 BS, it does not appear that he can file the petition with the bank guarantee as requested, and the date is fixed, it should be done in accordance with the law," the order from the court stated.
Along with the application, the former Home Minister also had submitted a bank guarantee equivalent to the amount attributed to him in the case. He submitted bank security worth Nepali Rupees (NRs) 27.4 Million.
Earlier, a bench led by Judge Bashisht Kumar Ghimire at the same court had set his bail at NRs 10 million on charges of fraud and organised crime for the embezzlement of money from the Supreme Cooperative.
Welcoming the court order, Lamichhane challenged the decision and approached the High Court, seeking cancellation of bail and a regular hearing date. However, the Butwal bench of the High Court in Tulsipur ordered his continued detention for judicial investigation on April 4.
Lamichhane has been in the Rupandehi prison since April 4 and had applied on August 4. Advocates Narayan Kandel, Rajendra Thapa and Mahendra Pandey argued for his release under provisions of the National Criminal Procedure Act, while government attorneys opposed the move, citing the Supreme Court's earlier decision to uphold his detention.
The cooperative fraud case alleges that Lamichhane and others transferred over NRs109 million from the Butwal-based Supreme Cooperative to Gorkha Media Network Pvt Ltd, misappropriating the funds.
Cases have been filed in Kaski (Suryadarshan Cooperative), Chitwan (Sahara Cooperative), Kathmandu (Swarnalaxmi Cooperative) and Parsa (Sano Paila Cooperative). In all the districts, Lamichhane has been accused of diverting deposits to Gorkha Media Network, which ran the now-defunct Galaxy 4K Television.
Lamichhane was arrested from his party office in Kathmandu on 18 October, 2024 by a team from the Central Investigation Bureau on charges of organised crime and misappropriation of cooperative funds.
On December 22, 2024, the Kaski District Police had formally lodged the case against Lamichhane on cases of fraud, organised crime and money laundering. The District Government Attorney's Office filed the charge sheet against Lamichhane and others at the Kaski District Court in connection with the Suryadarshan Cooperative fraud case.
He is accused of illegally amassing over NRs 270 million, with the money allegedly originating from Surya Darshan Savings and Loan Cooperative. The case also alleges that Lamichhane has not disclosed the source of NRs 2,78,944,705, which is considered to be of illicit origin.
Lamichhane's post as Member of Parliament has also been suspended after the District Attorney's Office filed a case of organised crime and money laundering.
The former Home Minister and founder of RSP, the fourth largest party in the parliament, has denied the charges of money laundering, cooperative fraud, and organised crime in his statement to the Kaski District Police.
In 2024, a parliamentary committee formed to investigate the cooperative scam prepared and tabled a report in parliament on September 16, 2024. This report indicted Lamichhane for embezzling millions of rupees as part of the scam.
The seven-membered committee formed on May 28 last year was tabled in the parliament, which was formally endorsed by the house session. The report concludes that millions of rupees injected into Gorkha Media came from cooperatives which were traded on the basis of forged documents.
Former Home Minister Lamichhane had worked in Gorkha Media, the parent company of now defunct Galaxy 4K Television, as managing director at the time when cooperative savings were invested, violating cooperative legislation. Incumbent parliamentarian also had clarified that he was engaged in Gorkha Media taking a sweat share.
Lamichhane later in the year 2022 entered politics, announcing the formation of the Rastriya Swatantra Party, and entered the federal parliament as a parliamentarian, contesting the election the same year. The television, failing to pay salaries to its staff, shut its formal operation since last year.
The committee in its report has also recommended that the government take legal action against everyone involved in the transfer of money to Gorkha Media from various cooperatives. Millions of rupees were inducted into Gorkha Media from various cooperatives, Suryadarshan from Pokhara, Supreme from Butwal, Swarnalaxmi from Kathmandu, Sahara Chitwan from Chitwan and Sanopaila from Birgunj.
The report has stated that embezzlement of amounts was completed in the active involvement of GB Rai, Kumar Ramtel, Rabi Lamichhane (then managing director), and Chhabi Lal Joshi. Rai and Lamichhane had operated a joint account in the bank and had issued cheques amounting to millions, which shows their involvement, the committee report includes.
"Every company has its own objective and spirit. Promoters and shareholders are the ones with the main responsibilities in such institutions. Those in the role and responsibility as shareholders, promoters and managing directors cannot be allowed to not be responsible and accountable for the money received by the company," the report stressed.
During the investigation, the committee also had held inquiry session with former Home Minister and incumbent Chairperson of Rastriya Swatantra Party (RSP) Lamichhane for over 10 hours. Throughout the inquiry session he claimed to be unaware about the transfers that were made to the Gorkha Media originated from cooperatives, that too savings of about 50,000 people.
Further arguing over the case, Lamichhane also claimed the Rabi Lamichhane who had borrowed money from Suryadarshan and Supreme Cooperatives also to be someone not in his knowledge. The committee had asked him a set of 50 questions about his alleged involvement in the scam.
Following the tabling and endorsement of the report, House Speaker Devraj Ghimire directed the government to implement the report of the parliamentary special inquiry committee formed to investigate misappropriation of savings of cooperatives. Speaker Ghimire then directed the Parliament Secretariat to send the report to the government for implementation.
The HoR had formed the committee headed by CPN-UML lawmaker Thapa on May 28, 2024 after Nepali Congress demanded formation of a parliamentary investigation committee saying Rastriya Swatantra Party President Rabi Lamichhane, who was then deputy prime minister and home minister, was involved in the misappropriation of cooperative savings. The HoR had initially given the committee three months and later extended its tenure by 15 days.
Dilendra Badu of Nepali Congress, Ishwari Neupane, Sabitra Bhusal of UML, Lekhnath Dahal of CPN (Maoist Center), Shishir Khanal of RSP, and Dhruba Bahadur Pradhan of Rastriya Prajatantra Party were members of the parliamentary committee.