It was an abrupt U-turn. Some of the better known social media users close to the CPN-UML, the biggest party in the ruling coalition, had overnight started criticising Deputy Prime Minister and Minister for Home Affairs Rabi Lamichhane over the embezzlement of cooperative funds. Until a day ago, they had been his strong defenders.

The party, which earlier rejected the involvement of Lamichhane in a cooperative fraud case, has now voiced its concern over the potential involvement of a sitting home minister. This happened after a police investigation report on Monday named GB Rai and Lamichhane among those who had misappropriated funds from the Butwal-based Supreme Cooperative.

Based on the findings, the Rupandehi District Attorney’s Office filed a chargesheet in the district court against 28 suspects (except Lamichhane)under Section 32 of the National Criminal Procedure (Code) Act 2017.

Rai, chairman of the Gorkha Media Network, which is now dysfunctional, was also the patron of Supreme Cooperative and has been found to have routed Rs140 million of the cooperative to the network in 2021. Lamichhane at the time was the managing director of the network.

UML chair KP Sharma Oli, while addressing an event of the party’s Jhapa District Committee on Tuesday, said people not involved in cooperatives were working to defame the institutions by misappropriating the money deposited there. Though Oli didn’t mention Lamichhane, his allusion was clear enough.

Lamichhane, who has been accused in a case of cooperative scam, claims he has no account in any of the cooperatives and hence denies any chances of him defrauding the cooperative money.

“While some cooperatives are doing well, others have turned into places where people can be conned,” Oli said while addressing the programme. “There are many cases where outsiders have defrauded millions of individuals in cooperatives.”

Lamichhane’s Rastriya Swatantra Party, which made an impressive entry into national politics from the November 2022 parliamentary elections, is the third largest party in the ruling coalition. Unity in the five-party coalition is a must for the longevity of the Pushpa Kamal Dahal-led government.

Police investigating the fraud at the Supreme Cooperative concluded that Rai and Lamichhane prepared loans in the names of people and businesses and embezzled the savings “without completing due process”.

The police report shows Lamichhane received around Rs2o million from the same cooperative. However, police officers claim that a case against Home Minister Lamichhane was not filed in Rupandehi District Court as someone could have been trying to defame him by misusing his name to create a fake loan account.

In connection with the scam, the Attorney’s Office filed a case in Rupandehi District Court on Monday with Rai as one of the 28 defendants.

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 a mention of his name in some of the loan documents. He repeated the claim on Tuesday in his social media post.

"There is nothing other than my name... There is no signature of mine nor thumbprint … I have filed no application, nor has a general KYC [form] been filled.”

Inspector General of Nepal Police Basanta Kunwar echoed Lamichhane in the same March meeting, saying “no proof had been unearthed” against Lamichhane.

The UML fiercely opposed the demand for a parliamentary committee to investigate Lamichhane. Though the main opposition, Nepali Congress, was relentless in pressing its demand for a probe committee, the UML was one of the staunch supporters of Lamichhane in Parliament, much like Prime Minister Pushpa Kamal Dahal.

The Dahal-led government even decided to prorogue the winter session of Parliament after the Congress appeared dogged in its demand for a probe committee.

“Our party will raise the demand for a parliamentary committee to investigate Lamichhane’s case in the new House session too,” Bishwa Parkash Sharma, a general secretary of the Congress, told the Post. “We are not demanding the home minister’s resignation, but we want an investigation committee.”

If the government denies their demand, then, in the upcoming session of the parliament “we will present ourselves in the House with a document of proof of Lamichhane’s wrongdoing,” Sharma said.

CPN-UML whip Sunita Baral told the Post that though the party has no official stand on Lamichhane’s fraud case, it is clear that no one is above the law.

“If someone is found guilty with evidence, then they have no right to remain in a public position,” Baral said. “It is not necessary that you resign just because someone asks for it but then you also cannot remain in position when you are found guilty by law.”

A lot of people have been victims of cooperative fraud and our party believes that the perpetrators should be held to account, Baral said.

But the Rastriya Swatantra Party leaders see it as an attempt at personal sabotage. “Our party president Lamichhane has been targeted ever since the announcement of our party [formation] and we see this as its continuity,” a senior RSP leader told the Post on the condition of anonymity. “On the Supreme Cooperative scam, we are yet to analyse the matter.”

Without substantive discussion within the party, they had nothing to share with the media, the leader stressed.

Section 122 of Cooperatives Act 2017 provisions legal action if a loan is obtained by providing false or erroneous information, or if a loan is obtained or issued by establishing or running a fake business. However, according to investigating authorities, Lamichhane didn't fabricate information or create a phoney company.

Meanwhile, Nepal Police does not seem ready to take action against Lamichhane. “The case is now under the preview of the Rupandehi District Court. We will take action, if necessary, after the court’s decision,” said Kuver Kathayat, deputy inspector general of Butwal Police. A similar case has been lodged against Lamichhane in the Kaski District Court.

On April 10, another opposition Rastriya Prajatantra Party (RPP) echoed the Congress’ demand for a parliamentary probe. Even the ruling CPN (Unified Socialist) party had urged the government to heed the opposition parties' demand.

Lawmaker Rajendra Pandey of the Unified Socialist, speaking in the lower house on April 10, drew the government’s attention to the main opposition’s demand. He also seconded the proposal for a comprehensive investigation into cooperative scams and corruption cases.