Top cooperative figures jailed for embezzling billions of rupees

KATHMANDU, SEPTEMBER 5: In Nepali, there is a saying, “Greed leads to gain, and gain leads to grief.” This adage has proven true for certain figures who once appeared as "shining stars" in Nepal's cooperative sector. As these figures exemplify this saying, it has led to the entire cooperative movement in Nepal being discredited.

Some well-known cooperative managers, who accumulated social status, honor, respect, and significant wealth through cooperatives, are now serving time in prison. By disregarding the fundamental values, principles, and guidelines of cooperatives and seeking short-term gains, they have lost all the social and material assets they once amassed.

Here, we discuss a few of these representative figures, who are likely to be remembered in history as villains of the Nepali cooperative movement.

From Former MPs to Ward Chairs in Prison

Those jailed for cooperative fraud range from former MPs to ward chairs. Ichchharaj Tamang, who embezzled billions of ordinary people's deposits in Civil Cooperative, is currently serving a prison sentence. He is also a former MP.

Though not from a wealthy family, Tamang was once known as a billionaire. While working as a professor at Pulchowk Engineering Campus, he gained fame as a successful businessman. He operated a Civil Group, Civil Bank, and Civil Cooperative, and also delved into real estate through Civil Homes. Using Civil Cooperatives, he further expanded his business.

By enticing the public with attractive interest rates, he convinced thousands of people to deposit their money into the cooperative, which he then funnelled into his own companies. He used the profits from these companies to expand his business further but did not repay the cooperative's loans. This led to his fraudulent actions being uncovered, and he was ultimately convicted as a major fraudster, leading to his imprisonment.

Tamang did not go to prison alone. Along with him, his wife Srijana Tamang and his maternal uncle and chairman of the Civil Cooperative, Keshavlal Shrestha, were also imprisoned. Tamang was arrested in October 2021 on charges of cooperative fraud, with a case filed against him in the Kathmandu District Court seeking damages of Rs 5.67 billion. He was found guilty of misusing the deposits of ordinary citizens in a Civil Cooperative, and money laundering charges were also upheld, resulting in his imprisonment.

Ward Chairs Also in Jail for Cooperative Fraud

In addition to Tamang, ward chairs have also been imprisoned on charges of cooperative fraud. Kailashkumar Darlami, chairman of Ward No. 7 in Likhu Tamakoshi Rural Municipality, Ramechhap, was jailed for misappropriating depositors' funds from two cooperatives, Suryadarshan and Mitra Milan.

Under the leadership of Gitendra Babu "GB" Rai, who remains at large (due to his involvement in the cooperative scam), Darlami served as vice-chair of the cooperative. Although Rai remains a fugitive, Darlami and treasurer Kumar Ramtel from Lalitpur are currently serving time in jail. Along with Darlami, ten other individuals were sent to Kaski prison last December on charges of embezzling billions.

Long-time Cooperative Activist Also in Jail

K.B. Uprety, who had been active in the cooperative movement for decades and was the chairman of the National Cooperative Bank, is currently in Dilli Bazaar prison on charges of cooperative fraud. He was also the chairman of Ideal Yamuna Multi-Purpose Cooperative. He was arrested by police on June 19, and a case was filed against him in the Kathmandu District Court for fraud. The charge sheet filed against him indicates that he defrauded ordinary citizens of Rs 158.7 million. The court sent him to jail on July 30 for pre-trial detention.

A Longtime Leader in Jail

The story of K.B. Uprety highlights how the misuse of cooperatives for personal gain while ignoring the fundamental principles of cooperatives, can lead to serious problems. His story also provides insight into the broader issues facing Nepal's cooperative sector. Uprety had been involved in the cooperative movement for more than three decades, both nationally and internationally. Yet, despite his deep understanding of the core values of cooperatives, he engaged in unethical practices within his own cooperative, leading to his eventual imprisonment.

Other Major Fraudsters in Jail

Another prominent figure imprisoned for embezzling billions through cooperatives is Kedarnath Sharma, who ran Shiva Shikhar and Tulsi Cooperatives. He has been in Central Jail in Jagannath Deval for over a year. It was discovered that Sharma had used depositors' savings for his own investments in various businesses, including real estate. As his fraudulent actions came to light, Sharma fled, much like G.B. Rai is currently on the run.

However, Sharma was eventually apprehended by the Central Investigation Bureau (CIB). Following an investigation, Sharma was found guilty of embezzling billions, leading to a ruling by the Kathmandu District Court in September 2023, sending him to Nakkhu Jail. He was convicted of misappropriating more than Rs 14 billion from the cooperative.

Sharma's wife, Geeta Sharma, the cooperative's executive director, Amish Raj Bhandari, and Shikhar Organization's manager, Pushkar Mall, had already been sent to jail before him.

Similarly, Chandra Bahadur (CB) Lama, who embezzled billions through Kantipur Savings and Credit Cooperative and Pashupati Savings and Credit Cooperative, is also in jail. He is accused of embezzling nearly Rs 8 billion from depositors. A warrant for his arrest was issued by the Kathmandu District Court in March 2023. Lama fled but was arrested in Chitwan in May 2023. After a court order for pre-trial detention, Lama is currently in Central Jail in Jagannath Deval.

Another person who was jailed along with Lama is Himalaya Bikram Mall Thakuri, chairman of Kantipur Savings and Credit Cooperative. He is currently in Dilli Bazaar prison.

More Than a Dozen Cooperative Leaders in Jail

Rabindra Chaulagain, chairman of Deurali Multipurpose Cooperative, located in Satdobato, Lalitpur, is also in Nakkhu Jail for cooperative fraud. Other figures, including former officials of Suryadarshan Savings and Credit Cooperative in Pokhara, like former chairman Shivkumar Gurung (Mahendra Bhote) and software developer Bhaviswar Aryal, are serving time in Kaski Jail on similar charges.

The chairman of Nagarik Vikas Cooperative, Nunam Subba, is also in Nakkhu Jail for cooperative fraud. Similarly, Shankar Karki and Surendramani Paudel, chairman and CEO of Prime Multipurpose Cooperative in Pokhara, respectively, are also in Kaski Jail. Ajay Shrestha, chairman of Balidani Savings and Credit Cooperative and Siddhidata Multipurpose Cooperative in Pokhara, and Raman Paudel, chairman of Mitra Milan Savings and Credit Cooperative, are also serving jail terms.

Some Have Already Been Released After Serving Time

Sudhir Basnet, accused of defrauding cooperatives of billions, was jailed but has since been released. The chairman of Oriental Cooperative, Basnet was arrested in December 2016 for embezzling Rs 10 billion. Both the Kathmandu and Bhaktapur District Courts sentenced Basnet to prison for misappropriating deposits from the cooperative. After serving time, Basnet was released upon paying fines.

Lastly, Dipesh Pun, son of former Vice President Nanda Bahadur Pun, was also imprisoned for cooperative fraud. He was accused of embezzling Rs 780 million from Supreme Savings and Credit Cooperative, where he served as treasurer. He was released on bail after spending a week in jail.