DoMLI initiates probe as concerns of suspected money laundering arise over Tiger Palace Resort acquisition

Published On: September 21, 2023 11:50 AM NPT By: Tapendra Karki

KATHMANDU, Sept 21: The Department of Money Laundering Investigation (DoMLI) has initiated a probe into the contentious purchase and sale of the 'Tiger Palace Resort.' The anti-money laundering body of the government has raised concerns about the legitimacy of the transactions surrounding the five-star Tiger Palace Resort located in Tilottama Municipality, Rupandehi. Specifically, the body suspects that the resort, previously operated by Himalayan Tiger Investment Inc, was funded through illegal means.

On September 1, the DoMLI sent a formal notification to the police headquarters, invoking Subsection 1 of Section 25 of the Government Assets Clearance Act, 2074 BS. In this communication, the DoMLI requested that the police take appropriate measures and transfer the property's control to their jurisdiction. The decision comes as the physical structure of Tiger Palace Resort appears to have been built on government land, raising concerns about its financial dealings, including loans.

The act stipulates, "If the DoMLI receives information or complaints related to related offenses mentioned in the Schedule or other offenses according to prevailing laws, or if it is found that other offenses have been committed during the investigation of the offense under paragraph 2, the department has collected the related information, complaints and conclusions obtained from the investigation. The evidence and documents must be sent in writing to the investigation agency or authority according to the prevailing law for necessary action." 

Nepal Police Spokesperson DIG Kuber Kadayat confirmed receiving the notification from the DoMLI concerning the Tiger Palace Resort dispute. He stated, "We have received a letter to investigate the removal of government structures and some other matters, but we do not know what the subject is."

The DoMLI initiated this investigation while the Tiger Palace Resort dispute was pending in court. A complaint was filed earlier, alleging that the entire investment in the resort was illegal, prompting the DoMLI to investigate the matter as per the Anti-Money Laundering Act.

The DoMLI's inquiry encompasses complaints that the resort encroached upon public land to construct various structures and secured a loan from the Prime Bank by using government land under plot number 78 as collateral. Additionally, there are allegations that the resort inflated the cost of equipment and technology imported from abroad, a matter also under scrutiny.

Tiger Palace Resort was formerly managed by Silver Heritage Investments Pvt Ltd, an Australian multinational company with offices in Hong Kong. The DoMLI is also scrutinizing the purchase from Hong Kong.

Former President of NRNA, Kul Acharya, along with NRNA-USA President Buddhi Subedi, jointly acquired the resort. They ventured into this business by establishing a new entity in Europe at no initial cost. A complaint was lodged against them, alleging that they established a foreign company and used Hundi to funnel money into it. 

DoMLI sources indicate that the investigation was initiated due to significant losses incurred by the state during the purchase and sale process conducted abroad. Despite the obligation to pay capital and profit taxes, business transactions were carried out without fulfilling these tax requirements. Foreign investment firms can engage in overseas transactions, but if the transactions lack transparency, Nepali laws come into play, prompting the department's inquiry and police involvement.

The Tiger Palace Resort, formerly operated by the multinational company Silver Heritage Investments Pvt Ltd, was acquired by the team behind Himalayan Tiger Investments Inc., including Acharya and Subedi. A group of NRNA members conducted business overseas by establishing a company. Subedi, who also chairs Himalayan Tiger Investment Inc., publicly disclosed the acquisition of Tiger Palace Resort during a press conference on August 17. He expressed readiness to pay all taxes owed to the state as a result of the resort purchase, which amounted to 15 million US dollars (approximately two billion rupees). The resort had faced operational challenges for an extended period.

DoMLI sources assert that the resort's purchase and sale took place outside Nepal with the apparent intention of evading profit taxes and other related obligations. “While it represents a form of foreign investment, we are currently in the process of gathering the requisite evidence. It is vital to ascertain whether this investment was acquired in a lawful manner. Although it stems from a foreign investment process, we cannot dismiss the possibility of its illegitimacy. Consequently, we are also seeking assistance from the police,” stated an officer from the department engaged in the investigation.


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