Pokhara, 28 January | While the Nepal Police has demonstrated its capability to apprehend criminals globally with the assistance of INTERPOL, it has signally failed for two years to bring Gitendra Babu (GB) Rai, the mastermind behind a massive cooperative fraud, to justice. Rai is accused of embezzling over NPR 21 billion from more than a dozen cooperative societies, affecting thousands of common depositors. Investigations have revealed that the inability to arrest Rai is not merely a technical failure of the police but a result of direct collusion within high-level government agencies. The Parliamentary Special Inquiry Committee reported that the Department of Cooperatives and the Department of Immigration facilitated Rai’s escape from the country. Despite initially requesting the freezing of his passport in June 2023, the Department of Cooperatives issued a contradictory letter just days later to release the freeze, allowing Rai to flee systematically before a Red Corner Notice was eventually issued.
The situation has taken a more controversial turn under the current interim government led by former Chief Justice Sushila Karki. In a move widely criticized as politically motivated, the Office of the Attorney General has decided to withdraw charges related to money laundering and organized crime against GB Rai, Rabi Lamichhane (Chairman of the Rastriya Swatantra Party), and their associates. This decision essentially mandates the correction of charge sheets to remove money laundering claims, providing an exit for nearly 70 individuals involved in using cooperative funds for illegal networking businesses like Nature Herbs. Legal experts, including senior advocate Dr. Bhimarjun Acharya, have slammed this move, stating that the government is overstepping its authority by acting as a court. They argue that withdrawing high-profile cases undermines the rule of law and promotes a culture of impunity where the powerful are shielded while the weak remain vulnerable to prosecution.
The decision to drop money laundering charges poses a grave threat to Nepal’s international financial standing. The Financial Action Task Force (FATF) has already placed Nepal on its ‘Grey List’ due to deficiencies in monitoring illicit financial flows. By withdrawing these serious charges against high-profile individuals, the government has significantly increased the risk of Nepal being ‘Blacklisted.’ Officials from the Ministry of Finance warn that such a downgrade would lead to severe restrictions on international financial transactions, difficulties in opening Letters of Credit (LC) for trade, and complications in receiving foreign remittances. Furthermore, it could result in heightened scrutiny of the Nepalese passport and a decline in foreign investment. Instead of ensuring justice for the victims who have lost their life savings, the government’s current path risks isolating Nepal from the global financial system and institutionalizing lawlessness within its borders.
