DRI files case against capital-flight accused

KATHMANDU, Mar 5: Department of Revenue Investigation (DRI) has filed cases against proprietor of New Dahal Business Enterprises Padam Bahadur Rawat and his associate Narayan Poudel on the charge of involvement in misusing foreign currency. DRI has demanded fines of up to Rs 7.45 billion, or three times the amount involved (Rs 2.48 billion), and three years imprisonment.

DRI to move court over multi-million dollar capital flight

DRI has also asked Nepal Rastra Bank to investigate weaknesses and shortcomings seen in the internal foreign currency control mechanism at two banks involved, namely Nepal Investment Bank and Himalayan Bank, and to take required action if standard rules and regulations are found to have been violated. [break]

A press statement issued by DRI on Friday said that a month-long investigation found that the enterprise was engaged in misusing US$ 33.46 million on the pretext of importing various goods from Tibet. The investigation concluded that Rawat and Poudel were involved in submitting fake documents including customs declaration forms, credit receipts and custom receipts, with the purpose of misusing foreign currency meant for financing imports from Tibet.

The DRI investigation claimed that of the total amount misused, US$ 15.64 million was from Himalayan Bank and the remaining US$ 17.82 million was from Nepal Investment Bank. In the scam a number of drafts, telegraphic transfers and credit facilities available for import of goods from Tibet were issued.

Given rampant misuse of credit facilities provided to Nepali traders for importing goods from Tibet, DRI has also urged the government to find an appropriate alternative to this facility and check possible leakages.

During the investigations, DRI took legal statements from Poudel, who was arrested a month back at Durbar Marg, and other high ranking figures including the chief executives of the two banks. The statement said that the other accused, Rawat, is still at large. DRI likewise corresponded with Nepal Rastra Bank, inquiring about its control and supervision methodologies for foreign currency management.

The department has already corresponded with Nepal Police to arrest the absconding Rawat, the statement said, adding that the bank accounts of the two accused and their fixed assets have been frozen.

Similarly, DRI also interrogated officials of the Department of Customs, collected samples of signatures and forwarded these to the forensic laboratory of Nepal Police.