Money laundering and Nepali citizens' deposit in Swiss banks.
In a year-long study conducted in collaboration with the International Consortium of Investigative Journalists (ICIJ), the CIJ claimed it found that 55 Nepalis have invested in several foreign countries. Most of the dailies, except for the two official newspapers, in Kathmandu published the findings of the CIJ giving much importance. Nepal's law bars Nepalis from investing abroad.
The CIJ report showed that nearly a dozen business groups are involved in channeling their illegal wealth abroad and bringing the money back into the country in the name of foreign direct investment (FDI).
The investigation revealed that Nepalis had deposited more than Rs. 52 billion and they had already received their interest worth Rs. 774 million.
The report said that Nepalis started keeping their money in Swiss banks 1996 when the Maoist insurgency began in Nepal.
In the first year (1996), Nepalis deposited Rs. 1.24 billion, which increased continuously over the years.
The deposit reached Rs. 2.7 billion in a decade. But after the end of the conflict period, Nepalis' deposits in Swiss banks shrunk significantly.
It declined to Rs. 3.8 billion from Rs. 4.2 billion in 2006. Now, Nepalis have Rs. 35.84 billion in the Swiss banks. Many of those having their deposits in the Swiss banks are controversial Nepalis including politicians. But a few of them are not familiar names both in politics and business in Nepal. Minu Shah, a Nepali national, holds the largest amount in Swiss banks. She is married to SirvateraPrakash (SP) Chhibber, an Indian national. Her husband died in 2003.
The couple's sons hold Nepali passport. Records show that Minu and her sons deposited Rs. 2.6 billion. More than 60 percent of the FDI share amounting to Rs. 8.265 billion in Nepal was from 'tax haven' countries.
The British Virgin Islands and the nearby countries alone have an investment totaling Rs. 62 billion.
Ajeya Raj Sumargi is another man to deposit money in the Swiss banks. Sumargi's company has spread its tentacles far and wide.
According to information obtained from the Office of Company Registrar in Cyprus, on September 12, 2013, TeliaSonera Norway Nepal Holdings bought 20 units of share worth 15.2 million Euros (around 2 billion rupees) from Sumargi's company Airbell. Six days later, TeliaSonera Norway Nepal Holdings bought another 40 units of share worth 29 million Euros (3.98 billion rupees) from Airbell.
At the time, TeliaSonera Norway Nepal Holdings had invested in Ncell through holding companies. Like Airbell, Sumargi has close ties with Ncell and Zhodar Investments. On May 12, 2010, Trident Trust, an intermediary law firm, had registered Zhodar Investments in the British Virgin Islands, according to ICIJ.
Arjun Sharma, a director of Sumargi's company Muktishree Pvt. Ltd., is one of the investors.
According to a memorandum of understanding signed between Zhodar and Sumargi's Nepal Satellite Telecom Private Limited on May 23, 2011, Sharma is also a director of Zhodar Investments. Sharma also serves as a director of Muktishree Pvt. Ltd. Sumargi had transferred a total of $ 48,372,222(483,722,210 rupees) in 23 installments to Nepal without getting approval for FDI.
In 2011 and 2012, Zhodar Investments had sold 510 and 1000 units of share to TeliaSonera Asia Holding BV, which evaded taxes in Nepal while operating Ncell. On November 22, 2013, Zhodar Investments transferred 1060 units of its share to World Wide Incredible, a company registered in British Virgin Islands. On the same day, the company joined Sumargi's company Airbell Services as partner.
It means Sumargi is linked to these companies as well.
The 2015 Panama Papers leaks of the ICIJ showed that companies were registered in tax havens in UpendraMahato's name. Documents available show several companies owned by Upendra, his wife Samata Prasad and Niraj in different countries.
In their names, investments are seen in British Virgin Islands, Cyprus, Belarus, England and India.
Arjun Sharma, who works at Sumargi's Nepali company Muktishree Private Limited, has also his accounts in the Swiss banks. 'While registering the company in Cyprus, Sumargi has not only violated Nepali laws, but it's against the Cypriot laws as well.
The citizens of a country that bars investments abroad can't invest in Cyprus, too. NirajGovindaShrestha is another Nepali involved in massive tax evasion scam surrounding the sale of Ncell. Shrestha is also an investor in BelarusianNepalese-Kazakhstan Group (BNK Group) Limited in Belarus. When TeliaSonerasoldNcell, he had 20 percent share in the company. TeliaSonera sold its 80 percent share in Ncell to Malaysian company Axiata. Shrestha sold his 20 percent share to Nepali citizen Bhawana Singh Shrestha.
The Large Taxpayers' Office has ruled that that tax worth 11 billion rupees was evaded in the transaction. NirajGovindaShrestha has invested in more than a dozen companies in foreign countries.
As a non-resident Nepali, he is allowed to invest in foreign countries. But, since he has invested in tax haven countries, questions about the source of his investment have been raised.
According to a 2018 investigation by a Belarusian investigative journalist, Shrestha has invested in several tax haven countries. Together with Abdo's younger brother Michel Abdo, Shrestha has registered a company called Nostal Business Corp in the British Virgin Islands. NirajGovindaShrestha, UpendraMahato, and his younger brother BirendraMahato and Romeo Abdo are board members of Amkodor Holding Company in Belarus. Shrestha along with Indian nationals AmitJha, HiranyaPrakashDhar and Belarusian Igor Subbotin have registered Amkodor India JV Private Limited in India. Nepali citizens have also registered a company in India under similar name. YogeshLalShrestha and MenukaShrestha of Maharajgunj, Kathmandu, have invested in Amkodor Earth Moving Equipment India Private Limited. Saurabh Group is involved in tax evasion and trade of betel nuts.
According to the Department of Industry, the purpose of the Group is to produce soaps and betel nuts.
The investigation shows the Group has brought FDI from the United Arab Emirates (UAE), a tax haven country, for the same purpose. SulavAgrawal is director of four companies under the Group. He is also a partner of a company registered for the purpose of producing soap and betel nuts. This company has brought Rs 300 million in FDI from a UAE-based company to manufacture soaps and betel nuts in Birgunj.
The British Virgin Islands is not the only tax haven country from where Saurabh Group has sourced FDI. Krishna Holdings Ltd of Hong Kong, another tax haven country, has a 45 percent stake in Sarbottam Cement Pvt. Ltd of Nawalparasi, also run by Saurabh Group.
According to the details provided by the ICIJ, foreign citizens use Nepali citizenship to park money abroad. This is evident from the details of investment in a foreign country by Harish Kumar TodiAgrawal, BijeshTodi and BinduTodi.
In 2007, they registered a company called Woodstock Universal Limited in the British Virgin Islands. Stating Biratnagar-9, Morang as their address, Bijesh and Harish had submitted their Nepali passport for the purpose. BinduTodi, the other investor in the company, has Haryana, India, as her address. Harish and Bijesh are not renowned entrepreneurs in Nepal.
Investigation showed that they have investments in India too. While finding out facts about the company in which Bindu has invested, Harish and Bijesh were also learnt to be Indians.
The United States Department of State Publication Bureau of Counterterrorism and Countering Violent Extremism released on June 2, 2016 stated that Nepal has failed to work against or check to fund in terrorist activities.