The CIAA’s assistant spokesperson Keshav Prasad Ghimire said that it sent a request to the Cabinet through Chief Secretary Leela Mani Paudyal on Friday. The anti-graft watchdog’s move was prompted by the huge financial losses caused to a number of banks and financial institutions (BFIs) after the loans they had issued to Basnet turned bad.

According to the CIAA, Basnet had borrowed heavily from Rastriya Banijya Bank, the Employees Provident Fund and Nabil Bank to construct his Vegas City Housing Project in Imadol, Lalitpur.

The investments made by BFIs and individual investors in Vegas City and the savings of Oriental’s depositors were put to risk after Basnet was blacklisted for defaulting the loans, said the CIAA in a press release. It added that it began proceedings after studying the issue and consulting the BFIs involved.

“The planned high-level committee will be given full authority to manage Basnet’s assets in order to safeguard the money of the BFIs, the customers of Vegas City and the depositors of Oriental.”

Basnet’s company Kohinoor Hill Housing launched the Vegas City project in 2009 with money belonging to depositors of his Oriental Savings and Credit Cooperative. Kohinoor had promised to hand over the houses and apartments to the buyers in two to three years.

A total of 268 people had booked flats and another two dozen had booked individual homes at Vegas City. They had paid a total of Rs 830 million to Kohinoor. Similarly, Oriental owes Rs 3.89 billion to more than 7,000 depositors.

Basnet’s ambitious ventures, launched at the height of the housing boom, went bust after Nepal Rastra Bank put a cap on realty lending to cool the over-heated sector.

Beleaguered Basnet has been saying that he will clear his liabilities by selling off his housing projects including Vegas City. However, he has been immobilized after being blacklisted by the Credit Information Bureau for defaulting loans two years ago. He has also been disqualified to receive further credit.

Basnet had repeated the same commitment earlier to the high-level probe commission formed by the Ministry of Cooperatives and Poverty Alleviation.

Of the total 12,778 complaints registered with the panel against troubled cooperatives, 11,286 complaints are against Oriental. The panel said that Basnet’s liabilities amounted to more than Rs 6 billion out of the combined liabilities of Rs 9.63 billion of 130 troubled cooperatives.