KATHMANDU, Aug 1: One after another, some of Nepal's most prominent business figures are securing bail despite facing prosecution in high-profile cases involving securities manipulation, banking offences, insurance violations and money laundering. Their release has reignited a debate over whether investigators built weak cases—or whether powerful business interests are shaping the course of justice.
The controversy has put the spotlight on Nepal's financial crime investigation system, with scrutiny extending from the quality of investigations conducted by law enforcement agencies to the courts' decisions on bail applications.
Among those who have obtained bail are businessman Deepak Bhatta, former Federation of Nepalese Chambers of Commerce and Industry (FNCCI) president Shekhar Golchha, members of the Agarwal family associated with Shanker Group and executives linked to several major corporate houses.
At the centre of the debate is a fundamental question: Did investigators from the Central Investigation Bureau (CIB), the Department of Money Laundering Investigation (DoMLI) and the Office of the Government Attorney move too quickly in filing cases without gathering sufficient evidence? Or are the accused benefiting from their financial and political influence?
Bail rulings raise questions over landmark financial crime cases
A number of prominent business figures, including Deepak Bhatta, Shekhar Golchha, members of the Agarwal family linked with Shanker Group, and executives of various corporate houses, have started securing bail after being arrested and prosecuted in cases related to securities transactions, banking offences, insurance violations, and money laundering.
The release of the accused has triggered a debate over whether the cases filed against them were based on weak investigations or whether their influence and connections played a role in securing relief from courts. At the same time, questions have also been raised over whether investigative agencies — including the Central Investigation Bureau (CIB), the Department of Money Laundering Investigation (DoMLI), and the Office of the Government Attorney — rushed to file cases against business figures without collecting adequate evidence merely to demonstrate enforcement action.
Businessman Deepak Bhatta, who has allegedly been attempting to secure his release by maintaining links with influential figures, including Prime Minister Balendra Shah, recently moved the Supreme Court (SC). The apex court has sought reports from the lower courts explaining the basis and reasons behind the orders that sent him into custody.
Meanwhile, businessman Shekhar Golchha, who was arrested in the same case, has been released on bail of Rs 10 million following an order from the Kathmandu District Court.
Bhatta, considered one of the key accused in the case, remains in custody over allegations involving suspicious financial transactions worth billions of rupees, banking offences, and money laundering. He is the chairman of Infinity Holdings Pvt. Ltd.
A joint investigation conducted by the CIB of Nepal Police and the DoMLI has implicated dozens of businessmen and stockbrokers, including Bhatta, in an alleged network involving financial irregularities.
A single bench of Supreme Court Justice Binod Sharma on Tuesday ordered the High Court Patan and the Special Court to submit reports explaining the grounds for keeping Bhatta in custody.
Bhatta had filed a petition at the SC seeking to overturn the decisions of the High Court Patan and the Special Court, which had ordered him to remain in custody pending trial.
Two separate cases involving major financial claims have been filed against Bhatta.
The DoMLI arrested Bhatta on April 2, 2025, and launched an investigation into the allegations against him.
In a banking offence case involving a claimed amount of Rs 421.48 million, a division bench of High Court Patan judges Rishi Raj Bhandari and Somakant Mainali ordered Bhatta to remain in custody pending trial on June 19.
Similarly, in a money laundering case involving a claimed amount of Rs 26.63 billion, the Special Court also ordered him to remain in custody pending trial on June 17.
Bhatta moved the SC against both orders. The apex court will decide whether he should remain in custody or be released on bail after reviewing the case reports.
Earlier, on July 17, the Kathmandu District Court had ordered the release of businessmen Bhatta and Sulav Agarwal on bail.
A bench of Judge Shiv Prasad Acharya ordered their release on bail in three separate cases. However, they remained in custody due to the Special Court’s order in the money laundering case.
The Kathmandu District Court ordered Agarwal to deposit Rs 20 million and Bhatta Rs 15 million as bail in a case related to offences under the Insurance Act.
In another case related to offences under the Securities Act, the District Court fixed bail of Rs 23 million for Agarwal.
The Special Court fixed bail of Rs 15 million for Agarwal and Rs 10 million for Bhatta in another securities-related case.
Both had been sent into custody by the Special Court on allegations of money laundering.
Police arrested Bhatta on April 2 and Agarwal on April 5.
Another accused businessman, Shekhar Golchha, was also released on Tuesday after depositing Rs 10 million in bail, raising concerns over possible weaknesses in regulatory oversight or possible shortcomings in the case.
A bench of Kathmandu District Court Judge Pratima Kumari Bhattarai Pokharel ordered Golchha’s release after fixing separate bail amounts for two charges.
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Golchha, former president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and chairman of Golchha Group, was ordered to pay Rs 7.5 million in bail in an insurance-related offence and Rs 2.5 million in a securities-related offence.
However, the allegations against him and the legal proceedings are still ongoing.
Until a final verdict is delivered, Golchha will remain on bail while participating in legal proceedings, and the investigation against him will continue.
Earlier, Golchha had spent time in police custody in April before being released. The CIB had taken him into custody on April 23.
He was primarily arrested for investigation into alleged offences related to securities transactions.
Golchha Group is one of Nepal’s oldest industrial houses. Both Golchha and Bhatta have business interests in sectors including industry, banking, and insurance.
The case has intensified debate over Nepal’s financial crime investigation system, regulatory mechanisms, and oversight of major business groups.
Amid pressure from various quarters, investigations into Bhatta, Golchha, members of the Agarwal family linked with Shanker Group, and partners of various corporate houses have become increasingly complicated.
Nearly six months after the case surfaced, investigations against the accused have yet to reach a conclusion.
Broker, insurance dealings come under regulatory scrutiny
The broker company allegedly linked to businessman Deepak Bhatta’s money laundering case has been placed under investigation and possible regulatory action.
The DoMLI directed the Securities Board of Nepal (SEBON), the stock market regulator, and the Nepal Stock Exchange (NEPSE), the market operator, to take action against the concerned broker.
The investigation is currently underway.
Action against the broker was initiated after investigators found that Bhatta had made payments for purchasing shares, including shares of Nepal Reinsurance Company, through accounts other than his own.
According to the Department, Bhatta purchased shares through Broker No. 55, Bhrikuti Stock Broking Company.
Investigators found that Bhatta did not use his Siddhartha Bank account for share transactions but instead made payments through other sources.
For the purchase of shares, Rs 2.73 billion was provided by Himalayan Reinsurance, Rs 221.9 million by Himalayan Securities Banker, a subsidiary of the same company, and Rs 161.7 million by Nepal Micro Insurance.
Similarly, Rs 370 million from a subsidiary of Nepal Life Insurance and Rs 251.4 million from HLI Large Cap Fund were also used.
The investigation found that a total of Rs 3.81 billion was paid for the share purchases.
According to the Department, the broker company failed to fulfil three mandatory obligations during the transactions.
The broker was found to have violated the requirement of collecting at least 25 percent advance payment before share transactions, accepted payments from bank accounts other than those of the concerned individuals, and conducted transactions in violation of securities trading rules.
As part of regulatory action, SEBON temporarily suspended transactions through the broker company used by Bhatta for share trading.
During the investigation, authorities also found that Bhatta had played a role in transferring the insurance coverage of Hilton Hotel to Himalayan Reinsurance, another company linked with his investment.
According to regulations, such insurance coverage should have been placed with the government-owned Nepal Reinsurance Company. However, it was transferred to Himalayan Reinsurance.
After Hilton Hotel was damaged during the Gen-Z movement on September 9, the insurance claim filed after the damage has remained unpaid due to controversy surrounding the transfer.
Shreeram Tobacco deal adds another layer to the probe
During the investigation, the Department of Money Laundering Investigation (DoMLI) uncovered what it described as an unusual deal involving assets allegedly acquired illegally by businessman Deepak Bhatta.
Investigators described the transaction as highly unusual.
According to the investigation, Bhatta acquired a 20 percent ownership stake in a company with annual transactions exceeding Rs 10 billion and annual dividend distributions of Rs 500 million at the face value of the shares.
Shreeram Tobacco Industry had a paid-up capital of Rs 150 million.
After pressure was allegedly exerted to provide Bhatta with a 20 percent stake, the company’s paid-up capital was increased to Rs 187.5 million.
By increasing the paid-up capital from Rs 150 million to Rs 187.5 million, the company created reserve shares worth Rs 37.5 million.
The company’s directors transferred those shares to Himalayan Asset Management Company — a wholly owned subsidiary of Bhatta’s Infinity Holdings Pvt. Ltd. — at their face value of Rs 37.5 million.
Through this process, Bhatta became a shareholder of Shreeram Tobacco Industry.
Investigators found that within a few months of acquiring the shares by paying Rs 37.5 million, Shreeram Tobacco distributed dividends for two consecutive fiscal years.
The company distributed Rs 500 million in dividends in one fiscal year and another Rs 500 million in the following fiscal year, amounting to a total dividend payout of Rs 1 billion.
After tax deductions, Rs 190 million from the distributed dividends was found to have entered the account of Himalayan Asset Management Company.
While investigating why such an unusual transaction had taken place, the Department traced the matter to the company’s shareholders, Kamal Kishor Malpani and Chunnu Poudel.
Malpani connection with PM Shah adds complexity to probe
Malpani is the businessman who allowed Prime Minister Balendra Shah to use an expensive vehicle during the election held last March.
As the scope of the investigation expanded, the involvement of Malpani — who is said to have close ties with Prime Minister Shah — made the probe more sensitive and complicated.
The Inland Revenue Department and the Department of Revenue Investigation had launched separate investigations into Shreeram Tobacco, a company involved in the production of chewing tobacco products.
In connection with the case, the Department took UML leader and former Finance Minister Bishnu Paudel into custody from Surkhet on June 22.
He is currently on general bail.
Authorities have also initiated action against Triveni Distillery, a company linked to former Finance Minister Paudel.
Bhatta's extensive business network comes under scrutiny
Other businessmen connected to Bhatta’s network have also been taken into custody one after another.
Those arrested in the case include Shanker Group Chairman Shankerlal Agarwal, former Chief Executive Officer of Nepal Micro Insurance Mrigendra Nath Rimal, and former director of Crest Micro Insurance Mridula Saria.
Investigators found that the group led by Bhatta and Shankerlal Agarwal diverted more than Rs 421.48 million through Jagdamba Steels by misleading banks and using the funds for circular trading in the stock market.
An official involved in the investigation said Jagdamba Steels misused loans obtained from banks for industrial purposes and diverted them into “pump-and-dump” activities in the stock market.
Businessmen, including Raj Bahadur Shah, have also been implicated in the Bhatta case.
According to investigating agencies, Jagdamba Steels, a company under the Shanker Group, obtained substantial working-capital loans through a consortium led by Nepal Investment Mega Bank.
A consortium loan is a financing arrangement in which two or more banks jointly provide a large loan that may be too large or too risky for a single bank to provide on its own.
Investigators claim that the loan obtained in this manner was not used to purchase raw materials, increase production, or operate the industry.
Instead, the funds were allegedly diverted through various bank accounts before eventually reaching Infinity Holdings Pvt. Ltd., a company linked to Bhatta.
The funds were then allegedly used for “pump-and-dump” activities in the stock market.
Insurance companies at centre of alleged circular trading scheme
In the same case, insurance companies including Nepal Micro Insurance, Nepal Reinsurance Company, NLG Insurance, and Guardian Micro Life Insurance have been accused of artificially inflating share prices through circular trading.
Authorities allege that planned share transactions were carried out in these companies to create artificial demand in the market and manipulate share prices.
A collective case has been filed against 41 individuals, including Himalayan Reinsurance promoters Deepak Bhatta and Sulav Agarwal, under the Insurance Act.
According to the CIB, they used funds belonging to insurance companies and public institutions to carry out planned share transactions.
Separate cases related to securities offences, insurance offences, banking offences, and money laundering have been filed against Bhatta, Shankerlal Agarwal, Sulav Agarwal, Sahil Agarwal, and other defendants. The cases are currently under consideration in various courts.
The investigation conducted by the CIB, the DoMLI, and the Office of the Government Attorney found that the same group allegedly committed serious circular trading offences by buying and selling shares among themselves to increase trading volume and artificially inflate share prices.
The accused have also been alleged to have carried out planned transactions involving the shares of Nepal Reinsurance Company, NLG Insurance, and Guardian Micro Life Insurance to create artificial demand in the market and generate profits.
Government lawyers claim that these activities caused losses exceeding Rs 1.14 billion to insurance companies and public institutions.
Inside the alleged financial network surrounding Bhatta
Investigators describe the case as one in which pulling one thread led to the discovery of an entire network, with Bhatta emerging as one of its key operators.
According to investigating agencies, coordination among various companies, stockbrokers, and bank accounts was carried out under Bhatta’s leadership.
The CIB has also stated that digital evidence, including IP addresses, showed that share transactions linked to the case were conducted from offices associated with businessman Sulav Agarwal, including Saurya Cement and Jagdamba Steel.
Serious allegations have also been raised against Bhrikuti Stock Broking Company and other related brokers.
The investigation found that Bhrikuti Stock Broking Company allowed the purchase of billions of rupees’ worth of shares without adequate collateral, made advance payments in violation of regulations, and facilitated circular trading activities.
Four criminal cases map alleged financial crime network
Four separate cases have been filed in connection with the investigation.
A banking offence case has been filed against Deepak Bhatta, Shankerlal Agarwal, Sulav Agarwal, and Sahil Agarwal, seeking recovery of Rs 421.48 million.
Cases involving securities offences related to circular trading and market manipulation, insurance offences involving misuse of insurance company funds, and money laundering have also been filed against 34 individuals and two companies.
The government has sought claims exceeding Rs 22 billion against Bhatta and more than Rs 21 billion against Sulav Agarwal in the money laundering cases.
Bhatta and the Agarwal group have also been accused of misleading banks through Jagdamba Steels and diverting more than Rs 421.48 million into the stock market.
Investigators allege that working capital loans obtained from banks in the name of operating industries were diverted into the stock market, where the funds were used for circular trading involving billions of rupees.
The case has been described as one of the largest financial crime investigations in Nepal’s economic history.
The investigation has so far revealed that Jagdamba Steels, a company under the Shanker Group, obtained large amounts of working capital and short-term loans from Nepal Investment Mega Bank and other banks. However, investigators allege that the funds were not used for industrial operations as intended.
