While there have been multiple new revelations in the alleged involvement of Deputy Prime Minister and Home Minister Rabi Lamichhane in cooperative funds embezzlement, he has been consistently denying any such involvement.

On Wednesday, depositors of six cooperatives in Kaski formed a Cooperative Victims Struggle Committee and announced to launch a joint agitation demanding recovery of their deposits and action against those involved in cooperative scams.

Kiran Shrestha, coordinator of the committee, said that the gathering has decided to stage a huge protest of cooperative victims in Pokhara within a week. He said the decision was made after their demands were ignored even though they repeatedly drew the attention of top officials and leaders including Prime Minister Pushpa Kamal Dahal.

“We will continue our protests until our demands are addressed,” Shrestha said.

On Monday, an investigation report by the Rupandehi District Police Office into the troubled Supreme Saving and Credit Cooperative Limited in Butwal stated that the cooperative approved a loan of Rs20 million in the name of Lamichhane and, altogether, over Rs130 million was transferred to the Gorkha Media Network by the same cooperative.

Lamichhane was the managing director at the media company that operated the Galaxy 4K Television before resigning from the company to launch the Rastriya Swatantra Party under his leadership in July 2022. As the then managing director, Lamichhane also held 15 percent shares of the media company.

The police report also stated that the loan was released in the name of Lamichhane without following due process.

On Tuesday, the depositors of the cooperative, who have been unable to withdraw their money, took to the streets in Butwal, Bhairahawa and other places demanding the recovery of their deposits and punishment for those responsible. The victims in the two towns also staged a demonstration demanding an investigation against Home Minister Lamichhane.

Amid accusations of defrauding millions of rupees from several cooperatives, Home Minister Lamichhane has been repeatedly claiming that he doesn’t have accounts in any of the cooperatives and hence there is no question of his involvement in embezzling the deposits.

Lamichhane claims he was just an employee of the Gorkha Media Company and did not know all the details of its investments. He argues that he cannot be held accountable for the investments and loans involving the now dysfunctional company and its chair GB Rai.

The Company Act 2006 Section 2 (j) defines the position (managing director) held by Lamichhane as an ‘Officer’ of the company’s corporate body.

According to the Act, the definition of ‘Officer’ of a company includes director, chief executive, manager, company secretary, liquidator and any employee undertaking departmental responsibility of the company as the officer of the company.

While the Company Act 2006 mentions the managing director as an officer of a company, the National Penal Act 2017 states that the managing director is a responsible person who should be held accountable should the company commit any crime falling within the scope of his/her authority.

The National Penal (Code) Act 2017 Section 30 states that criminal liability for an offence committed by a body corporate [legal entity with separate legal existence from a company’s members or shareholders] is vested in one who commits or causes the commission of the act.

“Where any firm, company or body corporate commits, or causes the commission of, an act considered to be an offence under this Act or law, the person who committed, or caused the commission of, such offence shall be responsible for such act,” the Act reads.

“Where such a person cannot be identified… in case of a firm, the director, managing director, general manager who did or caused the doing of such an act… and where even such a person cannot be identified, the chief executive of such a body shall bear the criminal liability,” it says.

While Lamichhane claims that he was only an employee at the company, Advocate Om Prakash Aryal said that the aforementioned provisions make Lamichhane accountable to the company’s decisions to get loans from the cooperatives because he was managing director of the company at the time.

However, the Nepal Police that chargesheeted others with similar involvement in the scam have even not interrogated Home Minister Lamichhane.

Legal experts say there are strong grounds to establish Lamichhane’s guilt.

“If we are to abide by the law, Lamichhane is implicated in the cooperative scam and police have enough grounds to interrogate or detain him,” Aryal told the Post.

“Gorkha Media Network diverted cooperative funds, which is illegal. As the managing director is one of the crucial positions of the company and the Company Act 2006 also defines the managing director as an officer of the company and the National Penal Act 2017 designates the managing director as a responsible person if the company is involved in any criminal act, Lamichhane is considered guilty in this case.”

Police report shows Lamichhane received around Rs2o million from the Supreme Cooperative. However, police claim they did not file a case against Lamichhane at the Rupandehi District Court as someone might have been trying to defame him by misusing his name to create a fake account at the cooperative.

Police didn’t charge-sheet Lamichhane despite its investigation concluding that GB Rai and Lamichhane acquired loans “without completing due process”.

Based on the information that Rai had left the country, Police in January issued an Interpol diffusion notice against him.

In relation to the implicating documents that mention him, Lamichhane claims, “There is nothing other than my name... There is no signature of mine nor thumbprints … I have not applied for the loan, nor have filled a general KYC [know your client form].”

On March 27, speaking at the State Affairs and Good Governance Committee of the House of Representatives, Lamichhane claimed that there was no proof of his involvement in the cooperatives scam other than mere mentions of his name in some of the loan documents.

He repeated the claim on Tuesday in his social media post after the Rupandehi District Attorney’s Office filed a case at the district court on Monday against 28 suspects (except Lamichhane) under Section 32 of the National Criminal Procedure (Code) Act 2017.

“The managing director is one of the company’s decision makers and in-charge of all corporate policies and investment,” Raman Shrestha, former attorney general, told the Post. “Lamichhane is abusing his position of authority [as home minister]. He is currently in the ruling alliance, but that might not always be the case.”

“Would the law have protected a common man from punishment had they committed similar mistakes?” Shrestha asked. “No. So he too should not get the immunity just because he holds a position of power.”

Gorkha Media Network, with GB Rai as its chairperson and Lamichhane as managing director, was found to have illegally diverted the savings of around 35,000 depositors of several cooperatives totalling around Rs 525 million to Galaxy 4K Television.

Gorkha Media, on various dates, used around Rs300 million deposited by 19,000 people in the Pokhara-based Surya Darshan Cooperative, Rs117 million of Sahara Chitwan Cooperative and Rs107.4 million in the Butwal-based Supreme Cooperative.

Similarly, Swarnalaxmi Cooperative of Kathmandu, Sano Paila Cooperative of Birgunj and Samanta Cooperatives of Nepalgunj shuttered reportedly after the Rai-led group embezzled their deposits in huge amounts.

Lamichhane has been linked to both the embezzlement cases that are currently in Kaski District Court and Rupandehi District Court. Police have either detained or interrogated several people involved in the fraud cases but not Lamichhane.