The move comes around one and half months after the Central Investigation Bureau (CIB) arrested Ruby Joshy, chairman of the finance company, and Dr Sri Ram Prasad Lamichhane and Gauri Shankar Chaudhary, board members of the finance company. The CIB has since handed the three over to the Metropolitan Police Commissioner´s Office that oversees all police offices in Kathmandu Valley.[break]
“We forwarded the case to the district attorney´s office today (Sunday),” said DSP Arun BC, chief of Crime Investigation Department at the Metropolitan Police Range Kathmandu. “We hope the attorney´s office will file a case at the district court based on our report following which hearings will begin.”
The former three top officials of Sri Lanka Merchant, which has since merged with Nepal Bangladesh (NB) Bank, are charged of causing a loss of Rs 353.10 million to the finance company by issuing unsecured loans to borrowers related to promoters of the company and accepting shares of its own company as collateral to extend credit.
As per the Nepal Rastra Bank law, promoters who own more than one percent stake in banks and financial institutions cannot obtain loans from their own institutions. The law also bars banks and financial institutions from extending credit to individuals or firms whose interests are tied with such promoters. Besides, banks and financial institutions are also not allowed to accept shares of their promoters as collateral to extend loans.
However, Sri Lanka Merchant was found to have extended loans by securing shares of banks and institutions tied to NB Group, the major promoter of the finance company, as collateral, the CIB report says. The finance company was also found to have accepted shares of its own company, which were owned by NB Group, as security to extend loans.
“The company allowed this to happen despite knowing the borrower had defaulted on loans extended by other banks and financial institutions,” the CIB report says.
Police are now looking for Laxmi Bahadur Shrestha, one of the promoters of NB Group, for further interrogation. “We have already sent a notice in this regard. But he has not responded to our call,” said DSP BC.
Republica tried to contact Shrestha but he could not be contacted till late in the evening.
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