The National Bank, Bankers Association and the CEO of the bank drew the attention of the CIB, citing a violation of jurisdiction.
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The Nepal Rastra Bank, Bankers Association and CEOs of various banks have drawn the attention of the Central Investigation Bureau (CIB) to the violation of jurisdiction in the arrest of Nepal Investment Mega Bank Limited's Chief Executive Officer (CEO) Jyoti Prakash Pandey.
They have drawn the attention of the CIB to the jurisdiction, saying that the bank's CEO is within the regulation of the National Bank and that only the Banking and Financial Institutions Act, 2073 BS and the Secured Transactions Act, 2063 BS are applicable in the matter of loan auction.
The police arrested CEO Pandey on Wednesday in a case of alleged illegal sale of the assets of government-owned Smart Telecom Pvt. Ltd. The CIB has stated that Pandey was arrested under the Telecommunications Act, 2053 BS. However, officials of the National Bank and Nepal Investment Mega Bank are dissatisfied with the police, saying that criminal breach of trust should not be implied while auctioning loans. The police, however, have stated that Pandey was arrested not only in the context of the loan auction but also for other investigations.
CIB spokesperson SSP Shivakumar Shrestha said that the police have arrested CEO Pandey, who is also the chairman of the bank's 'Loan Recovery' Committee, for 'acting dishonestly with the intention of destroying the government's rights to government property.' 'On Wednesday, he was arrested from Kamalamai Municipality-6, Bus Park with the help of a team from the District Police Office, Sindhuli, while he was running away with his mobile switched off. We have taken permission from the court to keep him in custody and conduct an investigation,' Shrestha said.
Nepal Bankers Association President Santosh Koirala said that it is not right to arrest him just because the mortgaged property was auctioned as per the law. He said that it is the CEO's responsibility to auction the mortgaged property when the loan cannot be recovered. 'Even if there is any other offense, one can go for prosecution only after conducting an investigation first,' he said.
Nepal Rastra Bank spokesperson Guru Prasad Poudel said that the bank has the first right when selling mortgaged property at auction as per the law. Nepal Rastra Bank spokesperson Guru Prasad Poudel said that the bank has the first right when selling mortgaged property at auction as per the law. Recalling that there is a clear provision in this regard in Section 57 of the Banks and Financial Institutions Act (BAFIA), he said, "The first right belongs to the bank. However, when auctioning government-owned property, coordination should be done with the concerned debtors, stakeholders and government parties." However, spokesperson Poudel said that he was not formally informed about the arrest of Nepal Investment Mega Bank CEO Pandey.
Nepal Investment Mega Bank has issued a statement expressing objection to the arrest of CEO Pandey. The bank's statement states that the bank has recovered the loan in accordance with the prevailing laws/laws regulating banks and financial institutions, especially Section 57 of the Bank and Financial Institutions Act, 2073 BS and the Secured Transactions Act, 2063 BS, and the bank's loan recovery guidelines, as well as its legal obligation to recover the loans flowed from the deposits of depositors.
In this regard, officials of the Rastra Bank, including former CEOs, have said that the CEO should not be arrested on the grounds of commercial breach of trust while auctioning loans, as they should work in accordance with those two laws. 'It is wrong if CEO Pandey was arrested on the grounds of commercial breach of trust in the matter of auctioning loans,' a former CEO said, 'Nepal Rastra Bank should object to this matter, saying that its jurisdiction has been violated. It should clearly communicate with the CIB regarding the arrest of the CEO. Otherwise, the practice of arresting and harassing every bank official by the police will begin.'
But according to SSP Shrestha, when the bank issued the notice for the auction of Smart Cell's assets on 3 Asoj 2082, it was said that 'the owners of the properties connected to various equipment and materials related to telecommunication services should submit a bid by accepting the remaining house rent and electricity bill of Rs 400 million in one lump sum.' However, Shrestha says that the bank has committed the crime of fraud and criminal breach of trust by keeping that amount with itself and not giving it to the homeowners so far.
The police have already arrested the then Managing Director of Smart Telecom, Sarvesh Joshi, Palina Shrestha and Narendra Ulak on 21 Baisakh. Palina is the director of Professional Business Network Pvt. Ltd. and Narendra Transgate Tech Pvt. Ltd., which are participating in the auction process of Smart Cell's assets. Ncell Axiata Limited had obtained the materials of Smart Cell through this process.
‘We arrested them after it was revealed that they had asked a software company to submit an application in the settings to be handed over to Ncell,’ said CIB AIG Manoj KC. ‘Their relationship with Ncell and the details of the bank helping to deposit the money in the account have also been revealed.’ Therefore, KC claims that the bank has played a role in systematically transferring the assets of Smart Cell to Ncell Axiata Limited.
However, the bank has clarified that the money is being withheld to pay the rent to the property owners who have the equipment installed. "The bank published a notice of auction of various equipment and materials related to the debtor Smart Telecom Pvt. Ltd. on 3 Asoj 2082 and in accordance with the same notice, out of the 4.6 billion rupees received through auction, 4.22 billion rupees of co-financing loan facility has been repaid and the account has been blocked by the concerned body, so the remaining amount of 380 million rupees is remaining in the bank's account for keeping the proceeds from the mortgage auction," the bank's statement said. "This amount has been blocked for the purpose of paying the outstanding rent, electricity bills, etc. payable by the debtor to the owners of the houses where various equipment and materials related to telecommunication services are installed, and this amount will be paid sequentially accordingly after receiving a request for payment with proof from the concerned body."
