Retrieving the amount that controversial businessman Ajeya Raj Sumargi had withdrawn from Nepal Investment Bank Limited (NIBL) after a December 25 Supreme Court interim order has become ever more complicated with his company, Muktishree Cement Industries, using the money to make a number of payments.  

Sumargi had withdrawn most of $6.99 million (Rs801 million) which was in the account of Muktishree after the court order.

The amount was earlier frozen by the Nepal Rastra Bank (NRB), after Sumargi failed to show the source.

But in a bizarre turn of events, a division bench of Chief Justice Cholendra Shumsher Rana and Justice Ananda Mohan Bhattarai quashed the December 25 interim order, asking the NIBL to “maintain the balance as it was before the interim order”.

But by that time, Sumargi had already withdrawn most of the Rs801 million and transferred the money in parts to Nepal Bangladesh Bank, Prime Bank and Mahalaxmi Development Bank.

Two weeks after the court order, the NRB on Tuesday wrote to these three banks, asking them to return money to Muktishree’s account at the NIBL. But Muktishree had not just transferred the money to other banks from the NIBL but had also made payments for its liabilities. This has complicated the process of retrieving the money.

According to Gyanendra Dhungana, chief executive officer at Nepal Bangladesh Bank, the money it received from Muktishree’s account at the NIBL was the payment of the loans that his bank had extended to Sumargi’s firms. “After the payment of the loans, we have also released Sumargi’s collateral.”

He questioned the central bank’s intention as well because it allowed Sumargi’s company to withdraw the money swiftly and now asking his bank to return the money which was received as a loan repayment.

“We are holding discussions to find a way to deal with the issue,” he said.

According to an NB Bank source, Sumargi had paid loans of around Rs250 million to the bank.  

Although Sumargi had transferred around Rs100 million from the NIBL to Mahalaxmi Development Bank after the December 25 court order, he withdrew all the money from the bank on different dates immediately after the January 8 court order.

“In the last 7-10 days, the money was withdrawn on different dates to make various payments,” a senior official at Mahalaxmi Development told the Post. “There is only a minimum amount available in his account in our bank now.”

According to the official at the Mahalaxmi Development Bank, it would notify the central bank about the withdrawal of the entire amount. The Post’s repeated attempts to contact Prime Bank Chief Executive Officer Narayan Das Manandhar went in vain.

While return of the money transferred from other banks has become complicated, the NIBL said that it has maintained over Rs200 million in the account of Muktishree that the NIBL had deducted from that account as a payment of Sumargi’s other loans.

“Thus, we have adhered to the court’s order,” said Rabin Sijapati, deputy general manager at the NIBL. “We have also written separately to three banks—NB, Mahalaxmi and Prime—to return the money to our bank.”

The central bank, on the other hand, is yet to take any decision on ways to recover the withdrawn amount as Sumargi had used the amount in paying his other liabilities.

“We have written to the three banks to return the money to the NIBL. I cannot say about further step to be taken to implement the court order right now,” Narayan Poudel, spokesperson for the NRB, maintained, reiterating Tuesday’s position.

Banking experts, however, say that Sumargi can be forced to return the money if all of his bank accounts are frozen. “But the NRB didn’t take such measure actively as the court order has not specifically mentioned about the process of recovering the withdrawn amount,” a former NRB official said.

Read: Nepal government agencies say probe into controversial businessman Sumargi continues

Giving example of how the tradition of handing down the death penalty by hanging, the former NRB official said the court order nowadays says “hang until death” because in the history there had been examples where culprits were only hanged, and not let the convicts die in some cases. “So, the court nowadays usually also tells the entire process of implementing the verdict,” he said. “But this did not happen in Sumargi’s case when the court passed the latest order.”

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