Sajha Swasthya Sewa Cooperative, an institution in which the government has a significant stake, has suspended two of its staffers after a National Vigilance Centre probe found their involvement in irregularities while selling medicines.

Established in 1964, the cooperative sells medicines at a cheaper rate to its members and the general public.

The cooperative, where government entities have a 65 percent stake, currently have annual transactions of over Rs700 million, according to officials at the cooperative.

The NVC, a corruption watchdog under the Prime Minister’s Office, had initiated the probe after a complaint was registered on July 1 last year, stating that there has been irregularities that would hamper the interest of the shareholders and the general public. The cooperative has around 1,200 general shareholders.

During the probe, the NVC found that the cooperative’s outlets on the premises of TU Teaching Hospital and Nepal Police Hospital in Maharajgunj, Kathmandu, have less than the required stock of medicines and surgical equipment. Medicines worth Rs1.3 million were missing form the Teaching Hospital outlet, while medicines worth Rs 240,621 were missing from the Police Hospital outlet.

“After the NVC provided its probe report two weeks ago, we have suspended Nir Prasad Kafle, in-charge of our Teaching Hospital-based pharmacy, and Asutosh Adhikari, in-charge of our Police Hospital-based pharmacy,” said Shankar Dhakal, general manager of the cooperative. “We have instructed both of them to repay the amount within 15 days.”

He said the cooperative plans to take further action against the two, which may involve suspending their grades and demoting them from their positions.

The NVC had conducted an on-site inspection of the cooperative’s head office at Kapan, its sales outlets at Bhotahiti, Teaching Hospital and Nepal Police Hospital at Maharajgunj and studied documents available at its head office.

After studying the internal audit reports, the NVC suspected irregularities in the two outlets. An internal audit conducted between June 22, 2017, and December 4, 2018, showed that medicines worth Rs1.3 million were missing from the Teaching Hospital outlet. Although the outlet should have possessed a stock of medicines worth Rs8.16 million on June 22, 2017, medicines worth only Rs 6.8million were found, according to internal audit.

The NVC had inquired the staff and officials of the cooperative about the missing medicines, but they failed to come up with an answer, said NVC officials. Hence, the NVC concluded in its report that it could not be established that there was no corruption and irregularity. “An additional investigation should be conducted,” the NVC report says.

The NVC probe also found that cash earned by this outlet after selling medicines was not immediately deposited in its bank account.

During the period from June 6, 2017 to June 21, 2017, the outlet had sold medicines worth Rs5,18,059, but the amount was deposited in the cooperative’s bank account after more than a year. After finding such anomalies, the NVC probe report has recommended action against in-charge Kafle for failing to deposit the amount in the cooperative’s bank account on time.

Similarly, medicines worth Rs 240,621 were missing from the cooperative’s outlet in Nepal Police Hospital, according to the report. The centre studied the internal audit report of the cooperative from July 16, 2017 to May 5, 2018. The outlet in-charge Adhikari was also found to have deposited Rs 50,000 at the cooperative’s bank several months after selling the medicines.

As  several anomalies were seen during the probe into the cooperative’s two sales outlets, the NVC report says there is a possibility of irregularities in other sales outlets as well. There are a total of 32 such outlets across the country.

“We wrote to the Commission for Investigation of Abuse of Authority to conduct further investigation after finding a lot of anomalies,” said Bishnu Raj Lamichhane, spokesperson for  the NVC.