It also suspended Ram Dev Yadav, the managing director of Central Rural Development Bank (CRDB), and froze his accounts, for inducting Unity Chairman Kashi Ram (Prasad) Gurung, Managing Director Bishnu Bahadur Chhetri and Director Krishna Chhetri into the bank’s board, despite knowing about their illicit operations. [break]
“Bank accounts of Yadav’s father, wife and two sons too have been frozen,” a source told myrepublica.com. Action against Yadav was taken also because he had not informed the NRB about takeover of CRDB’s stake by Unity.
Unity in 2009 had acquired 58 percent stake of CRDB. NRB officials said they were not aware about this until recently because the central bank had actually handed over the stake to Fina World Cooperatives. “Apparently, Unity took over this stake from Fina World, and we were never informed,” said the source.
Interestingly, CRDB’s annual general meeting in 2009 had also decided to rename this class D regional rural development bank as Unity Rural Development Bank and had shifted its corporate office to Unity Tower at Jawalakhel, Lalitpur.
The government has also confiscated Yadav’s vehicle, which is valued at Rs 25 million.
Investigators and NRB officials, meanwhile, said that NRB’s top official’s refusal to freeze the bank accounts of Unity and its top brass against the order issued two weeks ago by the Ministry of Finance, might prove costly for its clients and the country as a whole.
“We have reached such a conclusion because the company at present has just around Rs 230 million in banks and financial institutions. And its total property and investments unearthed so far stand at just around Rs 800 million,” said the source.
On Friday, NRB had deployed rapid action teams in the Valley to trace out accounts and deposit details. The team found Unity has accounts in 11 commercial banks and financial institutions and money in those accounts stood at just Rs 180 million.
Going by the membership numbers and fees charged by Unity in Nepal and overseas, its property and cash in Nepal should have been around Rs 10 billion.
“However, we could trace just about Rs 1 billion worth of deposits and property. This indicates the company has already siphoned off huge amounts from the country,” said a source.
Of the total cash deposits traced so far, Unity has Rs 120 million in Everest Bank, Rs 4.7 million in IME Financial Institution and Rs 8.1 million in Nepal Investment Bank.
“It also has some cash deposit at Nepal Industrial and Commercial (NIC) Bank,” said the source, adding that the company mostly has accounts in banks in Gongabu, Lazimpat and Samakhushi areas.
PROBABLE CASE
Based on the findings so far, investigators have concluded that the government can institute a series of cases against Unity.
First, it operated banking activities without permission. This is a violation of banking laws. Secondly, the company also dealt in assurance (insurance) schemes without following due legal process in violation of insurance laws.
Forgery is another charge for which Unity can be punished. Likewise, Unity also attracts action for misappropriation of foreign currency and tax evasion, said an investigator.
“Our investigations have already confirmed the company of having international operations without due approval. This is violation of Foreign Currency Act,” said the source. It also draws actions against Money Laundering Prevention Act.
The company has also evaded Value Added Tax (VAT). It has paid TDS (tax deducted at source) on commissions paid, but has not settled income tax. Cases related to violation of the foreign currency act, money laundering laws and tax evasion will be dealt with by the Department of Revenue Investigation.
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