KATHMANDU, May 8: Eight insurance companies linked to businessmen Deepak Bhatta and Sulav Agrawal—both currently in the custody of the Department of Money Laundering Investigation (DMLI)—have come under intensified scrutiny over alleged irregularities in securities transactions.
The Nepal Securities Board (SEBON) has expanded its investigation after concluding that serious violations occurred in share transactions involving Bhatta and Agrawal. The probe centers on suspected irregularities in the informal issuance of pre-IPO shares and the mobilization of funds through founder shares ahead of Initial Public Offerings (IPOs).
Authorities suspect that funds were raised under the pre-IPO label without proper regulatory compliance. As part of the investigation, SEBON has sought detailed financial records from the concerned companies.
Despite repeated warnings issued by SEBON against such practices, the collection of funds in the name of pre-IPOs has reportedly continued. Officials say some companies are still engaged in raising investments through similar mechanisms.
Investigators further note that investors were not always allotted shares at face value. Instead, shares were allegedly sold at inflated prices through multiple intermediaries, with proceeds routed to sellers’ accounts rather than company accounts. On this basis, SEBON has placed several companies under formal scrutiny and sought details of founder-share purchasers.
The investigation covers Nepal Micro Insurance Company, Guardian Micro Life Insurance, Crest Micro Life Insurance, Liberty Micro Life Insurance, Protective Insurance Company, Star Micro Insurance Company, Trust Micro Insurance Company, and Himalayan Reinsurance Company.
Preliminary findings and widening probe
SEBON has already submitted a preliminary investigation report to the government. Rupesh KC, executive director of the SEBON-formed investigation committee, prepared a report focusing on transactions involving Bhatta. Another official, Dipesh Tamrakar, investigated dealings linked to Agrawal and his son, Krishav Agrawal. These findings now form the foundation of ongoing probes by DMLI and the Central Investigation Bureau (CIB) of Nepal Police.
Following correspondence from DMLI, SEBON’s deeper investigation concluded that Bhatta manipulated the securities market through artificial transactions, violating provisions of the Securities Act. The report states that he inflated share prices through credit-based trading without actual settlement of funds.
Business ideas matter
Investigators further allege that Bhatta influenced prices through cross-transactions between companies under his control and family-linked entities, including Himalayan Reinsurance, Guardian Micro Life Insurance, and Nepal Micro Insurance. He has been identified as the principal accused.
The report also names Shubhi Agrawal, Rishiraj More, and Rajbahadur Shah as alleged accomplices, all currently absconding. Businessmen Shekhar Golchha and Rohit Gupta have also been accused of assisting in the alleged offenses. Golchha was earlier arrested in connection with the case but was later released on bail by court order.
SEBON has recommended further investigation and legal action under Sections 94, 95, and 96 of the Securities Act, 2007.
Brokerage violations and unpaid settlements
The investigation also uncovered serious irregularities at the brokerage level. Bhrikuti Stock Broking Company is accused of selling shares to Bhatta without collecting the mandatory 25 percent advance payment.
No payment records were found in transactions involving Nabil Debenture (LBLD-085), NIMB Debenture 2090 (NIMBD-90), Nepal SBI Bank Debenture-2083 (SBID-83), SBLD Debenture-2089 (SBLD-89), and Nepal Reinsurance Company (NRIC).
Under Regulation 8 of the Securities Transaction Operating Regulations, 2018, investors are required to deposit at least 25 percent of the transaction value in advance. However, SEBON’s report states that this provision was violated.
The brokerage firm is also accused of failing to collect payments from buyers and failing to transfer funds to sellers within the required two working days after transactions.
Investigators conclude that Bhatta and the brokerage firm jointly manipulated the share price of Nepal Reinsurance Company (NRIC). Between July 21, 2025, and March 15, 2026, Bhatta reportedly purchased shares worth over Rs 3.80 billion and sold shares worth over Rs 930.5 million through the brokerage—without making any corresponding payments during the period.
The report further states that Bhatta still owes more than Rs 2.89 billion to the brokerage firm.
Authorities also found that Himalayan Reinsurance share prices were artificially pushed upward. On July 21, 2025, the price surged from Rs 1,461 at 12:56 PM to Rs 1,686.10 by 3:59 PM the same day.
SEBON states that such activities misled investors and distorted the secondary securities market, constituting offenses under Sub-sections 1 and 98 of Section 96 of the Securities Act.
Wider corporate network under scrutiny
Beyond Bhatta and the brokerage firm, the report highlights the involvement of several entities, including Himalayan Reinsurance Company, Himalayan Capserv Limited, Nepal Micro Insurance Company, Himalayan Securities Banker Limited, HLI Large Cap Fund, Rohit Gupta, and Golchha in the use and movement of funds.
Similarly, Shubhashree Agrawal, Himalayan Life Insurance Limited, Rishiraj More, and Rajbahadur Shah are also implicated in the alleged manipulation of NRIC share prices.
SEBON concludes that Bhatta and his associated individuals and companies engaged in serious financial misconduct by diverting funds from public companies and acquiring shares through individual accounts.
Complex cross-holdings revealed
The investigation also uncovers deep cross-ownership within the network. Records show Himalayan Securities Banker Limited is 75 percent owned by Himalayan Reinsurance Limited, while Bhatta holds 7 percent and Golchha 2.5 percent.
In Himalayan Investment Banker Limited, Ayushma Nepal, Bhatta's wife, owns 8.25 percent. The institution operates the HLI Large Cap Fund, a collective investment scheme.
Founder shareholder records of Himalayan Reinsurance show that Infinity Holdings Pvt Ltd, solely controlled by Bhatta, owns 4.5 percent, while Hansraj Hulaschand & Company Pvt Ltd, controlled by Golchha, holds 2 percent.
Similarly, Bhatta holds 15 percent shares each in Nepal Micro Insurance and Guardian Micro Life Insurance.
Crest Micro Life Insurance records show Himalayan Reinsurance Limited holding 15 percent shares, while Protective Micro Insurance records show Himalayan Reinsurance holding 21.43 percent.
The report further notes that Golchha served as chairman of Himalayan Reinsurance until March 9, 2026, while Gupta has been a director since March 4, 2024.
SEBON also states that Himalayan Capital Limited is a wholly owned subsidiary of Himalayan Reinsurance Limited.
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