The Special Government Attorney's Office has directed the Central Investigation Bureau (CIB) of Nepal Police to conduct further investigations into the banking offenses case involving Durga Prasai.
The office sent the case back to the CIB with additional instructions on Thursday, said Assistant Attorney General Sarita Pokharel, information officer at the Special Government Attorney’s Office.
The CIB had completed its investigation into the banking offenses and submitted the case to the Special Government Attorney's Office for prosecution in the fourth week of May.
However, the case was sent back to the CIB as further investigation was deemed necessary before prosecution.
"We sent it back yesterday along with instructions," Assistant Attorney Pokharel said.
Superintendent of Police Yuvaraj Khadka, the CIB spokesperson, also confirmed that the case had been returned by the government attorney.
He said that the investigating officer would proceed with further action based on the instructions received from the government attorney.
"The file has arrived. The investigating officer will proceed based on the instructions received from the government attorney," he said.
They did not disclose the specifics of the directives they had received.
Prasai is accused of taking a loan from a bank for one purpose but using it elsewhere. The Nepal Rastra Bank (NRB) had written to the CIB on February 5 to investigate the matter, following which the CIB had been conducting its probe.
Prasai was arrested in India on April 11 after the violent protest in Tinkune of Kathmandu on March 28.
On Thursday midnight, Kathmandu District Court Judge Dhruba Raj Karki ordered Durga Prasai and six others to be remanded in custody for further investigation, while the rest were released on bail.
During its investigation into the banking fraud, the CIB found that Prasai had taken loans from nine different banks and financial institutions at various times.
He was found to have taken loans totaling more than Rs 7.25 billion by mid-October last year.
Out of this, more than Rs 270 million was found to be involved in round-tripping, meaning fake transactions were shown, according to the CIB's findings.
Prasai is accused of engaging in suspicious transactions, including round-tripping (showing fake transactions) in accounts of various banks and financial institution, and related-party transactions involving conflict on interest.
Police investigations also revealed that loans taken for B&C Medical College Teaching Hospital and Research Center Pvt. Ltd. and Purbanchal Cancer Hospital Pvt. Ltd. were not repaid on time, leading to irregular principal and interest payments.
Additionally, Prasai is accused of inflating project costs to obtain larger loans than necessary.
The investigation found that the then NCC Bank (now Kumari Bank) had disbursed Rs 125 million in the name of Purbanchal Cancer Hospital.
Similarly, Nepal Investment Mega Bank Limited had disbursed Rs 50 million in the name of Hotel Atrium Pvt. Ltd., and Goodwill Finance Limited had disbursed Rs 100 million in the name of UA Medico Supplies and Equipment Pvt. Ltd, the investigations found.
The Nepal Rastra Bank, citing loan misuse, had written to the CIB on February 5 to investigate and take action against Prasai under the Banking Offense and Punishment Act and the Asset (Money) Laundering Prevention Act.
Section 8 of the Banking Offense and Punishment Act prohibits loan misuse. The CIB claims Prasai violated this provision.
“No one shall misuse the credit facilities availed from a bank or financial institution or let the same be misused by diverting in the purpose other than for which the credit facilities were availed,” the provision says.
Under this offense, the prison sentence is determined based on the claimed amount embezzled. The law specifies asset seizure, fines, and imprisonment proportionate to the claimed amount.
The amount that the CIB will claim from Prasai has not yet been disclosed.
If the claimed amount exceeds Rs 1 billion, the CIB can file a case demanding a prison sentence of 10 to 12 years according to the act.
Similarly, if the claimed amount is between Rs 500 million and Rs 1 billion, the prison term can range from 8 to 10 years.
For claimed amount between Rs 100 million and Rs 500 million, the CIB can file a case seeking a prison sentence of 6 to 8 years.
