The Commission for the Investigation of Abuse of Authority (CIAA) has appealed to the Supreme Court, expressing dissatisfaction with the verdict of the special court in the case related to the scam in the purchase of wide-body aircraft for Nepal Airlines Corporation. The CIAA appealed to the Supreme Court on Tuesday against the verdict, expressing dissatisfaction over the failure to punish those involved in the aircraft purchase case as per the demands made in the charge sheet.

The special court had found 4 Nepalis and 7 foreigners guilty and acquitted the remaining defendants. Exactly 1 year later, the CIAA appealed to the Supreme Court on Tuesday, calling the special court's decision erroneous and demanding punishment as per the indictment.

Dismissing the case filed by the CIAA on 22 Chaitra 2080, the bench of the then special court chairman Justice Tek Narayan Kunwar and two members, Justices Tej Narayan Singh Rai and Ritendra Thapa, had ruled on 20 Mangsir 2081 and found only 4 people, including the then chairman and general manager of the corporation involved in the aircraft purchase, and 7 foreigners on the contractor side guilty.

In the corruption case related to the aircraft purchase case, the Authority had filed a case in the Special Court on 22 Chaitra 2080 against 24 Nepalis, 6 foreigners, and two foreign companies supplying the aircraft, including former Minister Jeevan Bahadur Shahi, two former secretaries Shankar Prasad Adhikari and Shishir Kumar Dhungana, current Joint Secretary Buddhisagar Lamichhane, former Joint Secretary Jeevan Prakash Sitaula, demanding Rs 1.47 billion, 1.85 billion, 482 crore.

About 8 months later, on 20 Mangsir 2081, the Authority had expressed dissatisfaction with the decision to recover the amount from 11 people found guilty, even though the amount was found to be wrong as per the Authority's claim. The other defendants involved were acquitted and only 4 Nepalis and 7 foreigners were found guilty.

Exactly one year after the verdict by the Special Court, the Authority filed an appeal demanding punishment as per the charge sheet, saying that the verdict was flawed and unfair.

The CIAA had named the then Tourism Minister Shahi, the then Tourism Secretary Adhikari, the then General Manager of the Corporation, Kanshakar, the former Finance Secretary Dhungana, who was the Director General of the Customs Department at the time of the purchase agreement, Buddhisagar Lamichhane, the Joint Secretary of the Ministry of Tourism and a member of the Corporation's Board of Directors, and another member of the Board of Directors and the then Director General of the Money Laundering Investigation Department, Sitaula, as defendants.

The then board members of the corporation involved in the aircraft purchase decision process, Teknath Acharya, Nimanuru Sherpa, Muktiram Pandey, Achyutraj Pahadi, then acting director Ramhari Sharma Sedhai, the corporation's deputy general manager Janakraj Kalakheti, then deputy director Prabhas Kumar Karmacharya, then director Ganesh Bahadur Chand, then acting director Karna Bahadur Thapa, senior pilots Subash Rijal, Shravan Rijal, Rabindra Kumar Sherchan, then deputy general manager Ramesh Bahadur Shah, then acting director Rabindra Shrestha, directors Upendra Poudel, Umesh Poudel, then deputy director Paras Poudel and Brihatman Tulachan, were made defendants.

Deepak Sharma, a British citizen of Nepali origin, who was then the head of the aircraft supplier company International Supply Chain and AAR International Inc. America, Christian Nuhlen, a director of Hifly X Ireland Limited and representative of German Aviation Capital, Oleg Calistru, a citizen of Romania/Moldova and finance director of German Aviation Capital, John M. Holmes, president and CEO of AAR Corporation Inc. America, Anna Topa, managing director of German Aviation Capital GmbH, Germany, and Paulo Mirpuri, president of Hifly Airlines/Hifly Transport Aeros Portugal, were also made defendants. However, even though the amount established by the authority was determined, it was decided that the amount determined would have to be recovered from the 11 people found guilty.

The special court had found only the then Chairman/General Manager of the Corporation, Kanshakar, former Secretary Adhikari and Dhungana and Joint Secretary Buddhisagar Lamichhane, and foreign nationals Sharma, Oleg Calistru, John Holmes, Ana Topa, Paulo Mirpuri, Gerald Thornton and Christian Neuhelen guilty and acquitted the rest.

‘The court found the above-mentioned defendants guilty of causing illegal damage to Nepal Airlines Corporation in the purchase of aircraft and sentenced them to imprisonment and fines in accordance with the indictment, while not punishing all the defendants and partially convicting some defendants and acquitting some defendants, and also not saying anything about the criminal acts committed by the defendants under Section 9 of the Prevention of Corruption Act, 2059 BS as per the indictment.’ 

The appeal of the Authority has stated that the decision of the Special Committee to punish the guilty and acquit those involved in the procurement process in a corrupt manner is erroneous and unfortunate.

The Special Committee has demanded that the case be quashed through an appeal, saying that the case was decided by ignoring the precedents set by the Supreme Court and the facts/evidence confirmed by the investigation.

Kansakar was sentenced to 2 years and 6 months in prison for the offense. According to the legal provisions for additional punishment for corruption committed in a high position, the Special Committee had imposed an additional 3 months in prison on Kansakar. He was ordered to pay a fine of Rs 122.59 million and an equal fine.

The then Tourism Secretary and Chairman of the Corporation, Adhikari, was sentenced to 1 year and 6 months in prison. He was also sentenced to an additional three months in prison for corruption committed in a high position. Dhungana and Lamichhane were sentenced to 1 year and 6 months in prison each and a fine of Rs 122.59 million.

AAR CEO John Holmes, German Aviation Capital Managing Director Ana Topa, Hifly X Chairman Paulo Mirpuri and Director Gerald Thornton were also found guilty of colluding with three other companies in the procurement process when Sharma's company won the contract to purchase a wide-body aircraft. It was confirmed during the investigation that Kalistru opened Hifly X to buy the aircraft. All seven foreign nationals found guilty were sentenced to one and a half years in prison and a fine of 125 million 90 thousand and the same amount.

A company with a foreign citizen as its chairman was formed and on February 19, 2073, two large aircraft were purchased and sold to the Corporation for 24 billion rupees. At that time, it was specifically found that the aircraft were purchased and sold in violation of the Public Procurement Act, 2063 and the Public Procurement Regulations, 2065.

A complaint was filed with the Authority on December 27, 2073 in the aircraft purchase case. Two years later, on December 26, 2075, the Public Accounts Committee of the House of Representatives directed the Authority to investigate the matter. The 55th and 56th annual reports of the Auditor General also pointed out that the aircraft procurement process was not legal.

The Authority also said that ‘ignoring the legal facts of public procurement and with the malicious intent to cause losses to the Corporation, the unlawful price increase conditions in the MOU and the provision that the major technical specification of the aircraft’s load capacity was reduced from 242 tons to 230 tons but the payment was made at 242 tons should be cancelled and corrected, but without doing so, it is against the law to recommend the facility of dollar exchange without bank guarantee security in collusion with the company that submitted the proposal and the officers/employees of the Corporation’. Shahi was the Minister of Tourism when making this recommendation.

The CIAA had accused the defendants of ‘arbitrarily’ amending the procurement criteria while purchasing aircraft for the corporation, making provisions in a manner that favored a certain company, paying more than the aircraft’s carrying capacity, and recommending dollar exchange facilities for payment without bank collateral. The company involved in the procurement process was also made a defendant in this case.

Initially, a subcommittee was formed to purchase new aircraft, but it was removed and an old aircraft was purchased instead. A procurement committee was formed under the coordination of the then General Manager Kansakar to purchase old aircraft.

Kansakar had formed a three-member subcommittee under the coordination of Board of Directors member Surya Prasad Acharya to form a study committee to purchase aircraft. On Asad 30, 2073, the Board of Directors revised the criteria and decided to purchase the aircraft from the Council of Ministers. Then, the subcommittee submitted its report on Shrawan 32, 2073. Two months later, the board of directors of 5 Asoj had directed the corporation management to bring a 3-year action plan including procurement. However, the work did not proceed accordingly. 

In the meantime, the then tourism secretary Prem Kumar Rai was transferred and Shankar Adhikari came to the tourism department. After the official came, a secret game was started with foreign companies and agents to buy old aircraft. According to that game, Kansakar had formed a subcommittee under the coordination of acting director Ramhari Sharma. The same subcommittee had given the opinion that it would be appropriate to buy the A-330-200 wide-body aircraft of the aircraft manufacturer Airbus. Before that, when the agreement was reached between Airbus and the corporation in November 2009, the price per aircraft was 88 million 99 thousand 317 US dollars.

According to the previous MOU, when the price increase was added in 2017, the price per aircraft was fixed at 118 million 163 thousand 773 US dollars, but the process was last moved to buy aircraft manufactured after 2014.

The Authority is dissatisfied with the decision, saying that this provision was made to purchase products from a specific company and a specific year in collusion, and that it was a game designed to embezzle government property, but the Special Court ignored the facts and evidence to prove it, and only partially punished those who committed corruption in the purchase. The Board of Directors of the Corporation had amended the criteria on 30 Ashad 2073 and decided to purchase the ship from the Council of Ministers.

Similarly, on 7 Baisakh 2074, the Council of Ministers had decided to provide a loan of 25 billion rupees from the Provident Fund and the Citizen Investment Fund for the purchase of the ship. The Authority found the defendant guilty and sentenced him to imprisonment and fines to recover the amount of 1.47 billion rupees demanded by the defendant. The remaining defendants were acquitted by imposing imprisonment and fines. 

The investigation by the Authority revealed that the company paid an overpayment of $6.6 million by showing a ship with a higher carrying capacity, created an additional liability of $6.788 million by showing an increase in the market price, and obtained documents from the company before receiving the contract and revised the criteria accordingly.

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