Based on the investigation conducted by the CIB, the District Attorney's Office, Kathmandu, filed a case at the Kathmandu District Court on Monday for fraud and violating the Nepal Rastra Bank Act.
What you should know
A case has been registered in the Kathmandu District Court against Prabhu Management Pvt. Ltd. founder Devi Prakash Bhattachan and operator Kusum Lama on charges of defrauding various cooperatives across the country by not paying remittance transactions and deposits. Three others, including Prabhu Bank's CEO Ashok Sherchan, have also been arrested in the same case. However, they have not been released from custody even though they have not been made accused.
The police claim that Prabhu Management has taken responsibility for paying the money coming to Nepal from abroad through Prabhu Remit to villages and that the company has also made a separate agreement to pay through the cooperative.
The remittance company has set up another layer in the name of Prabhu Management, contrary to the rules of the Nepal Rastra Bank, and that the company has also made an agreement with the cooperatives for payment and taken a deposit, but the cooperative has not returned the amount paid for the remittance and the deposit, and has committed fraud.
In her statement to the police, Lama said that Prabhu Management has yet to return the amount of 500 million 100 million 61 thousand 555 rupees, including the amount of remittances from 1,103 cooperatives and the amount paid in advance by the agent cooperatives.
The police claim that the details collected from Prabhu Management's system show that 1 billion 883 million 481 thousand 976 rupees have yet to be paid to the cooperatives. However, the police say that the amount was set as a loss since the complaint was only worth Rs 65.2 million. According to the Central Investigation Bureau (CIB), 38 cooperatives have filed complaints claiming this amount.
Based on the investigation conducted by the CIB, the District Government Attorney's Office, Kathmandu, filed a case in the Kathmandu District Court on Monday for fraud and violating the Nepal Rastra Bank Act. The case has been filed against Prabhu Management's owner Kusum Lama, former MP Bhattachan, and employees Hem Kumar Mahaju, Rameshwor Sapkota, Shrutika Tamang Lama, Santosh Kumar Lama, Prabhu Money Transfer and Prabhu Management as defendants.
Hearing the case, the bench of District Court Kathmandu Judge Pitambar Sharma on Tuesday ordered the remand of Hem Kumar Mahaju, the assistant accounting chief of the management, for trial, while CIB chief AIG Manoj KC said that a bail of Rs 700,000 has been sought from former shareholder Ram Babu Prasad Jayaswal.
Bhattachan had established Prabhu Money Transfer in 2059 BS to provide facilities for Nepalis who had gone to Malaysia and the Gulf countries for employment to send money back home. Ten years later, Prabhu Management was established with Bhattachan and Kusum as directors. This company was set up to act as a super agent for the transaction of remittances received through Prabhu Money Transfer. Although Bhattachan was also involved in this company in the past, Kusum has been the sole owner since 7 Bhadra 2081.
Lama, who initially filed a complaint against Bhattachan, is now absconding, while the police arrested Bhattachan and detained him for 15 days, but the Government Attorney's Office, Kathmandu, released him on bail, saying that he should not be detained for investigation.
'When the two companies reached an agreement on 1 Poush 2069, the intention was to appoint Prabhu Management as a representative to work so that the money sent by workers abroad to their relatives in Nepal through the banking system would be sent and received through cooperative organizations in the relevant places,' the charge sheet states.
According to the police, the money collected from the cooperative was used to increase the management's share capital and to provide Shrutika (Tamang) Lama with a paycheck to purchase shares in the company. 'It has been seen that Bhattachan's daughter Shiksha Bhattachan was asked to purchase shares from the paycheck, and later Kusum kept the shares in her name from Lama,' the police report says.
Police say that Bhattachan has been found to have held shares in the names of employees Shiva Sharma Acharya, Dhrubchandra Dhital, Daksha Poudel Subhash, Ganesh Kumar Ghimire, Hem Kumar Mahaju, Narayan Dhakal and Shrutika Tamang Lama to run the company in his own way and gain personal benefits.
Police also say that Bhattachan has made an agreement with Prabhu Management, assigning himself the responsibility of looking after ‘all office matters’ of Prabhu Money Transfer. ‘It is seen that Prabhu Money Transfer has given loans to various companies contrary to the provisions of its articles of association and regulations, has collected a large amount of interest on the loans given to Prabhu Management, and has not returned the money received as salary from Prabhu Management,’ police say, ‘It is seen from the bank statement that Bhattachan has taken Rs 138.90 crore from Prabhu Management’s account even after leaving Prabhu Management.’
The police have said that this incident is not just a matter of reconciliation between two companies and firms, but also a matter of receiving remittances from abroad, making payments, reconciling them, and following the policies and instructions issued by the National Bank, so it is not just a matter of reconciliation like a civil liability. Rather, it is said to be a fraud committed without 'pre-funding' with the intention of defrauding and defrauding.
