KATHMANDU, Nov 18: A new investigation has been initiated into former Prime Ministers Sher Bahadur Deuba and Pushpa Kamal Dahal regarding money laundering, following forensic tests that confirmed the presence of burnt banknotes and ash from their residences, which contained both Nepali and foreign currency. The Department of Money Laundering Investigation (DMLI) has also launched a similar inquiry into former Energy Minister Deepak Khadka.
Teams from the DMLI have already visited the homes of Deuba, Dahal, and Khadka and prepared official inventories, allowing the investigation to move to its next phase. Although statements from the accused will not be taken immediately, officials said the team is drafting questions and identifying their sources of income.
Prime Minister Sushila Karki has instructed DMLI Director General Gajendra Thakur to probe the assets further based on the forensic report. A senior official at the PM’s Office said the government suspects the leaders may have accumulated illegal wealth through corruption or revenue evasion. DMLI officials also said that the burnt cash found at their homes lacked identifiable sources, though they have chosen not to comment publicly.
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With the green signal, the DMLI has appointed investigation officers and begun the process. DG Thakur emphasized that investigations are guided strictly by law and will remain confidential. Officials said the aim is to prevent illegally acquired assets from being used for criminal activities, as cycles of money laundering continue.
Earlier, a joint DMLI–Nepal Police Central Investigation Bureau (CIB) team had collected ash and burnt banknotes from the houses identified as suspicious and sent them to the police forensic lab. The report arrived a few days ago. The team had prepared inventories at the homes of Deuba, Dahal, Khadka, and UML Chair KP Sharma Oli. Only burnt books were found at Oli’s residence; the DMLI has not disclosed further details.
After receiving the forensic report, the DMLI briefed Prime Minister Karki and Finance Minister Rameshore Khanal about the progress. Based on the findings, a path has formally opened to investigate Deuba, his wife Arzu Rana Deuba, Dahal, and Khadka for money laundering.
During the September 9 fire incident linked to the Gen-Z protests, videos had surfaced showing piles of burnt cash at the homes of Deuba, Dahal, and Khadka. A video from Khadka’s residence also showed money being thrown outside. Khadka has said the burnt cash was money he had brought for Dashain, while Deuba has denied having any burnt money at his residence.
At Deuba’s house, burnt fragments of Nepali notes (1,000 and 500 denominations) and US dollars were recovered. Rumours about a money-storage tunnel at his residence were dismissed as his team clarified it was an underground water tank. Videos also showed safes being broken at Dahal’s Khumaltar residence.
The DMLI found nothing except burnt notes at the homes of Deuba, Dahal, and Khadka. Investigations into the assets of Deuba, his wife Arzu, and former minister Khadka are ongoing, with the department intensifying its review of evidence collected so far.
On September 21, DMLI teams revisited the houses of Deuba and Khadka, inspected the damage, and prepared formal inventories. The ash and remnants were sent to the forensic lab. The department had also forwarded photos, videos, and other materials circulating on social media for examination.
Prime Minister Karki, in her address to the nation on September 25, had highlighted that state agencies had already begun investigations into the unusually large amounts of cash found burned during vandalism and arson at private residences amid the Gen-Z protests.
