The Kathmandu Valley Crime Investigation Office has arrested five individuals associated with Gautam Shree Multipurpose Cooperative Ltd and Gorkha Savings and Credit Cooperative Ltd.
Among those arrested is Rabin Bista, the manager of Gautam Shree Cooperative.
According to police, Gautam Shree has 4,791 depositors with total savings amounting to Rs 4.06 billion. While records show that Rs 2.05 billion was disbursed as loans, there are no documents or records for the remaining sum, police said.
From Gorkha Cooperative, Chairman Iman Singh Rai, Chief Executive Officer Lal Bahadur Chhetri, Abin Kumar Rai, and former accounts member Karna Bahadur Rai have been arrested.
Gorkha Cooperative has 10,598 depositors with total savings of Rs 4.05 billion. According to police, investigation revealed that only Rs 1.49 billion was issued as loans, leaving a massive portion of the savings unaccounted for.
The investigation found that the cooperatives were unable to refund depositors because the loans provided were issued against poor-quality collateral, without any collateral at all, or against assets already frozen by banks.
Police have moved the investigation forward after obtained a judicial remand of the suspects.
