Agarwal was arrested the day after Deepak Bhatt was arrested in an investigation into suspicious financial transactions between Infinity Holdings and Shankar Group.
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Shankar Group Chairman Shankar Agrawal has been arrested in a money laundering investigation. Agrawal was arrested on Friday during an investigation into suspicious financial transactions between Infinity Holdings and Shankar Group.
Based on a letter from the Money Laundering Investigation Department, the Central Investigation Bureau (CIB) of the police arrested Infinity Holdings chief Deepak Bhatt from Naxal, Kathmandu on Thursday. Agrawal was arrested the next day.
Agrawal has been remanded in custody at the District Police Complex, Lalitpur. Nepal Police and department officials did not want to give a formal response to Agrawal's arrest. 'It is not possible to talk much about the ongoing investigation,' said officials from both agencies.
After suspicious financial transactions worth crores were found, the Nepal Rastra Bank had sent a letter to the department to investigate the financial transactions between Shankar Group and Infinity Holdings two and a half years ago. Then the department took an initial statement from Bhatt in December 2079. But after only a general investigation, the department returned the complaint to the National Bank in April 2020 without prosecuting the case. After senior RSP leader Balendra Shah became the Prime Minister, the department revived the old file and started the investigation again.
It was revealed that Bhatt and the Shankar group, which had invested in hydropower, insurance, microfinance, travel agencies, educational institutions, various public contracts and foreign companies producing arms, real estate/real estate companies, etc., had various suspicious transactions between 2077 and 2079/80.
During the preparation of the annual budget for 2079/80, Bhatt was accused of manipulating the tax rate in the budget in a way that benefited the Shankar group. The role of the then Finance Minister Janardan Sharma in preparing the budget was also seen as suspicious. Bhatta was accused of having a role in providing tax exemptions to benefit the Shankar Group even when preparing a supplementary budget during the Sher Bahadur Deuba-led government in 2078/79.
After suspicious transactions were found through the bank accounts of Bhatta and Shankar Group, the Financial Intelligence Unit (FIU) of the Nepal Rastra Bank had sent a letter to the department asking it to investigate. According to the details mentioned in the letter sent by the Nepal Rastra Bank to the department, Rs 450 million was ‘transferred’ from an account in the name of Jagdamba Steel Pvt. Ltd. at Nepal Investment Bank in June 2021. Jagdamba is a company of the Shankar Group. It was found that Rs 300 million 1587 thousand was ‘transferred’ to an overdraft (OD) account in the name of Bhatta in June and July 2021 and Rs 450 million 445 thousand was withdrawn from this account.
As per the terms and conditions approved by the bank, the OD account should be operated only to avail loans or repay loans, but up to Rs 450 million was transacted from Bhatt's account, which had a limit of Rs 50 million. At that time, Bhatt himself had an OD limit of Rs 440 million, but in July 2021, it was found that Rs 184 million 95 thousand was deposited and Rs 634 million 93 thousand was withdrawn.
The department had investigated after the legitimate source of the transaction between the two parties was not confirmed. However, the relevant officials say that both the directors of Shankar Group and Bhatt did not allow the investigation to proceed by using the power center. Recently, the investigation has been moved forward by reviving the old file. Not only Shankar Group and Bhatt, former Prime Ministers Sher Bahadur Deuba, KP Sharma Oli and Pushpa Kamal Dahal, who are accused of giving them 'political protection', are also currently being investigated for money laundering. The department has arrested and is investigating former minister and Congress leader Deepak Khadka in the money laundering case. According to an official of the department, other directors of the Shankar Group are also under investigation.
It is alleged that both these groups have been manipulating the Insurance Authority and the Securities and Exchange Board of Nepal (SEBN) from the past to making laws that suit their interests and to interfering in policy matters in a way that conflicts with their interests. Both Agrawal, who was arrested on Friday, and Bhatta, who was arrested on Thursday, have partnerships in Himalaya Re-Insurance. Shankar Group is involved in Jagdamba Steel, Jagdamba Motors, Jagdamba Enterprise, Riddhisiddhi Cement, Union Life Insurance, and various hydropower projects.
