NRB to seek more details from Sumargi

Kathmandu February 2- As businessman Ajeya Raj Sumargi continues to lobby with political parties to get approval from Nepal Rastra Bank (NRB) to bring around Rs11 billion from abroad, the central bank has said that it would provide clearance only if Sumargi produces documents that the NRB has sought from him.

Sumargi, who owns Muktishree Group, has been struggling to get clearance from the NRB since the last three years.  Nepal Rastra Bank has frozen over Rs3 billion that Sumargi brought from the British Virgin Islands stating that it did not follow the due procedure as per the Foreign Exchange Regulation Act and also stopped him from bringing in an additional Rs8 billion from abroad.

The Department of Money Laundering Investigation has also been investigating Sumargi’s investment plan in suspicion of black money and financial risks the planned loan from foreign countries for Sumargi’s company carries.

Sumargi, of late, has been able to persuade the Finance Ministry and the Department of Industry to write to the central bank to open the door for bringing the halted amount.  On January 25, the Department of Industry sought NRB’s opinion about whether Sumargi could be paved the way for borrowing $30.03 million from the British Virgin Islands for Mukti Shree Cement as per the Foreign Exchange Regulation Act and existing NRB directives. “We received a letter from the department on January 28. We cannot give approval to borrow loans from abroad until we have the documents that we asked for earlier,” said Trilochan Panegni, spokesperson of NRB. “His company has not yet produced necessary documents we have sought.” However, another NRB official said approval from NRB would depend on whether the governor and new deputy governors would be influenced by Sumargi.

The NRB on August 5, 2015, had asked Muktishree Group for the reason behind borrowing loans from abroad, the basis for repayment, areas where the loan will be utilised, foreign exchange risk and submit details about the company that is providing loan, along with the repayment timetable.

Initially, Sumargi’s company had started an approval process to bring around Rs18 billion from abroad but NRB rejected it, according to an NRB source. Sumargi then brought Rs3 billion from the British Virgin Islands based on Investment Board Nepal’s decision, without taking approval from NRB. As per the Foreign Exchange Regulation Act, NRB’s approval is a must to borrow loans from abroad.

It was then that the central bank froze the money held at Nepal Investment Bank and Nabil Bank, and told the company to fulfill due legal procedure to borrow the planned loans. Four years ago, Sumargi had submitted a FDI proposal to the government to bring money from two different countries. It had sought to bring $45 million (Rs4.5 billion) from Zhodar Investment  Company in Britgish Virgin Islands and $65 million (Rs6.5 billion) from Airbell Company based in Cyprus to invest in Nepal Satellite Telecom. Of them, Sumargi brought $12 million (Rs1.2 billion) from British Virgin and $19million (Rs1.9 billion) for the telecom company.