Bring those responsible for collaboration to justice

With the arrest of former Deputy Prime Minister and Home Minister Rabi Lamichhane on charges of embezzling millions of rupees from various cooperatives, there is a glimmer of hope among worried cooperative victims that they will be able to recover their deposits sooner or later. Lamichhane’s arrest shows that the government is serious about combating cooperative fraud. Lamichhane, president of the Rastriya Swatantra Party (RSP) and member of the House of Representatives, is one of the “senior” politicians suspected of involvement in the misuse of ordinary depositors’ money. Lamichhane is also under investigation for organized crime.

Investigation

Lamichhane was detained according to the report of the parliamentary commission of special investigation and police investigation. A parliamentary commission of inquiry has suggested that the government open a judicial inquiry into his involvement in the misuse of co-operative funds. The seven-member probe committee was formed more than four-and-a-half months ago after the Nepal Congress disrupted parliamentary proceedings for more than two months. The group was led by CPN-UML MP Surya Thapa. The committee also indicted many persons for their alleged involvement in the cooperative fraud.

When a Central Bureau of Investigation (CBI) team arrived at the RSP head office at Banasthali in Kathmandu to arrest Lamichhane on Friday evening after receiving a warrant from the Kaski district court, party cadres and supporters chanted slogans against the government. However, the police caught him and then took him to Pokhara for trial as a case was registered against him at the Kaski district police station. In Pokhara, RSP supporters also staged protests against Labi’s arrest, saying it was politically motivated, while cooperative victims rallied to demand the return of their deposits.

Although Lamichhane has denied the allegations leveled against him, various other investigations by the police and Pokhara Metropolitan City have also implicated him in the misuse of funds of several cooperative societies. Instead, he accused the government of abusing state power to protect its leaders and failing to hold corrupt figures accountable.

Lamichhane had to be arrested as soon as the parliamentary inquiry committee submitted its report to the government. Some RSP leaders cut short their trip to China after receiving signals that the government was preparing to arrest Lamichhane. They suspected he would be apprehended when former Deputy Inspector General Chabi Lal Joshi was arrested about four weeks ago. Joshi was arrested on charges of misuse of funds from the Pokhara-based Suryadarshan Cooperative Society. Lamichhane, Joshi, Gitendra Babu (UK) Rai and others have worked with Gorkha Media Network. They are accused of misappropriating millions of rupees transferred to their media through various cooperatives based in Kaski, Chitwan and Rupandehi. Lamichhane was the organization’s managing director.

It is alleged that Lamichhane wanted to stop the investigation process against him by all means possible when he served as Home Minister in the previous government. Seven months ago, Nepal’s Inspector General of Police Basanta Kunwar said no political investigation had found any evidence of Lamichhane’s involvement in the cooperative scam.

Lamichhane quickly gained fame as a TV show host. As he began to gain popularity, he entered politics in 2022. In November 2022, he was elected as a member of the House of Representatives from Chitwan 2 with 49,264 votes. But in January 2023, he lost his position as an MP due to a fictitious citizenship issue. However, in April 2023, he was re-elected as a member of the same constituency with 54,175 votes.

Worsening situation

Nepal’s cooperative sector has been in crisis for the past few years. Called one of the three pillars of the national economy, the sector has faced problems due to misappropriation of depositors’ money. The lack of effective supervision and monitoring is a key factor in the deteriorating situation of cooperatives. The evil intentions of cooperative operators, lacunae in legislation and political protection of those involved in this crime are other reasons for the growing crisis in cooperatives. Hundreds of co-ops across the country are believed to be facing problems.

The Parliamentary Inquiry Committee report shows that more than Rs. $63 billion was misappropriated by co-op operators from numerous distressed co-ops across the country. Many cooperatives have misused funds by investing in the real estate business. The government should not delay in bringing other “high-profile” defendants to justice. It needs to take urgent action to protect the cooperative sector and keep cooperatives running. The government should focus on returning depositors’ hard-earned money as quickly as possible. It must ensure that the cooperative sector operates in accordance with its norms and values.

(The author is a former deputy editor of this daily newspaper.)

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