Businessman and former president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Shekhar Golchha was arrested on Thursday for securities and insurance-related offenses. While the Money Laundering Investigation Department is continuing its investigation, the police have also initiated an investigation into Golchha for securities and insurance-related offenses. 

Based on a complaint from the Nepal Securities Board, the Central Investigation Bureau (CIB) of the police arrested Golchha from the office of the Golchha Organization in Narayanchaur, Naxal on Thursday afternoon. CIB spokesperson SSP Shiva Kumar Shrestha said that Golchha was taken into custody with an arrest warrant from the District Court, Kathmandu.

Police have said that they have initiated an investigation into Golchha for the offenses of false trading in the securities market, price fluctuations and affecting the securities market, which are prohibited by the Securities Act, 2063. The accused Golchha is the outgoing chairman of Himalayan Reinsurance Company.

Businessman Shekhar Golchha arrested

The Money Laundering Investigation Department has also stated that a separate investigation is underway against Golchha for the crime of laundering money through suspicious transactions in the stock market through an insurance company. According to department officials, in this case, Golchha, along with Shankar Group Vice Chairman and Jagdamba Holdings Chairman Sulabh Agrawal, Infinity Holdings Chairman Deepak Bhatt, and their business partners, including directors of Himalayan Reinsurance and then officials and employees of the Insurance Authority and Securities and Exchange Board of Nepal, are also being investigated for money laundering. 

According to related sources, in the month of Sawant (the beginning of the current financial year), with commercial purposes, Golchha, Ramesh Corp Vice President Rohit Gupta, Jawalakhel Group of Industries Managing Director Raj Bahadur Shah, Infinity Holdings Chairman Deepak Bhatt and Lucky Group Managing Director Amit Mor agreed to conduct a collective share transaction. As per the agreement, everyone raised money. Everyone also collected money in the same account through the banking system. Some shares were also bought from the same fund.

‘The objective of friends collecting money together and forming a fund and investing the fund amount in the capital market and earning good profits in a short time is not bad or illegal in itself,’ said a partner. But when it is discovered that one of the partners has cheated, the relationship suddenly turns into hostility. The same thing happened between the aforementioned partners. In a conversation with Kantipur, one of the five partners said that 3.73 billion 85 million 24 thousand 226 rupees of public money have been embezzled in the name of Bhatt in listed companies including Himalayan Reinsurance, Himalayan Securities Banker, HLI Large Cap Fund and Nepal Micro Insurance against the law.

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Bhatt has been saying that Sulabh did this without his knowledge. Securities and insurance related... When Golchha, Shah, Gupta, Mor and others came to know that there was a mess and that their money was misused to buy shares, they called an emergency meeting. Bhatt was also present in the meeting. There was a lot of discussion in the meeting. The issue of returning the amount of irregularities committed by Bhatt and Sulabh was also raised. But that was not possible.

Because the Money Laundering Department and other regulatory agencies had already started an investigation into Bhatt and Agrawal's transactions. At the same time, Bhatt and Sulabh's bank accounts were also frozen and are still frozen. Their accounts are still frozen as the investigation is ongoing. According to two sources who attended the meeting, Bhatt had expressed his anger at Sulabh, while Sulabh was apologizing in a very emotional manner. 'Sulabh started crying, admitting that he had made a mistake and held Golchha's feet and apologized. However, the apology was not enough to get the money back,' the source told Kantipur.

Himalayan Reinsurance Chairman Golchha had told Kantipur that he had resigned after learning about the irregularities. 'Such a huge amount of money was transacted, and the money of various public limited companies was also embezzled in the purchase of shares,' Golchha had told Kantipur in the last week of Chaitra. 'There was no proposal in this regard in the Himalayan Reinsurance Company's board of directors meeting. I resigned from the post of chairman the day I came to know about this activity.' He also claimed that he was not the ultimate beneficiary of the transaction.

According to the CIB, an investigation was initiated against the individuals mentioned in the Securities and Exchange Board of Nepal's preliminary inquiry report 2083 BS and Golchha was arrested in the process. In this case, the directors of Himalayan Reinsurance, brokerage companies Himalayan Securities, Himalayan Capserve, HLI Large Cap Fund and related traders and directors are also under investigation, according to a CIB source. According to the CIB, further investigation has been initiated by the CIB based on the complaint filed by the board under Sub-section 3 of Section 103 of the Securities and Exchange Act, 2063 BS.

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Section 94 of the Act states that false transactions should not be made in the securities market. ‘For the purposes of this Act, if any securities are purchased or sold directly or indirectly, but the actual ownership does not change, if the price offered for purchase or sale by another person is known and the offer to buy or sell is made at the same price and the transaction is made, such transaction shall be deemed to be an artificial or false transaction,’ the section states.

Similarly, Section 95 states that price fluctuation should not be made. ‘If anyone stabilizes, increases, decreases or changes the price of securities by conducting an artificial or false transaction, it shall be deemed to have caused price fluctuations,’ the section states. 

Section 96 states that no one shall influence the securities market. No one shall, directly or indirectly, by himself or in collusion with others, increase the market price of securities issued by a company with the intention of encouraging anyone to buy or sell securities or with the intention of preventing anyone from buying or selling securities, decrease the market price of securities issued by a company with the intention of encouraging anyone to buy or sell securities or with the intention of preventing anyone from buying or selling securities, stabilize the market price of securities issued by a company with the intention of encouraging anyone to buy or sell securities or with the intention of preventing anyone from selling securities, as stated in Section 96.

Section 98 of the Act states that no fraudulent transaction shall be made. The section states that if someone uses any technique, plan or act to deceive someone with the intention of buying, selling or exchanging securities with someone, or if someone deceives someone and makes them do any work or engages them in any work, it is an offense as a fraudulent transaction. 

After it was found that the accused Golchha was involved in Himalayan Reinsurance and related transactions, an investigation was also underway against other accused involved in it, according to a CIB official. The Securities and Exchange Board of Nepal (SEB) had filed a preliminary inquiry report with the Money Laundering Investigation Department and the CIB separately for investigation into this offense. The report prepared by the board has placed Sulabh Agrawal and Deepak Bhatta, Sulabh Agrawal's wife Shubhi Agrawal, Jawalakhel Group Managing Director Raj Bahadur Shah, businessman Rishiraj Mor and Sandeep Chachan in suspicious roles.

The board itself has shown the involvement of former president of the Federation of Nepalese Chambers of Commerce and Industry Golchha, vice president of Ramesh Corp Rohit Gupta and Himalayan Reinsurance, Himalayan CapServ, Himalayan Securities, HLI Large Cap Fund and Nepal Micro Insurance on behalf of the organization. In this case, the board's report has named Golchha as an accomplice in the crime. He resigned from Himalayan Re after being dragged into the money laundering investigation.

On the other hand, the Money Laundering Investigation Department has stated that preparations are being made to conclude the investigation. Bhatta and Sulabh Agrawal are currently under the control of the department in this case. According to sources related to the department, the arrested Bhatta and Agrawal are being investigated for their 'suspicious financial transactions' and investment and illegally acquired assets in the stock market. An official of the department informed that the facts and evidence revealed during the investigation and the statements of the accused were taken into account while writing the report.