Businessman Shekhar Golchha has been remanded in custody for four days.
On Friday, the Kathmandu District Court extended his remand for four days, according to court spokesperson Deepak Shrestha.
He was arrested on Thursday in Naxal, Kathmandu, for offenses under the Securities Act, 2007.
He was taken into custody for investigation after links were found between him and the business dealings of controversial businessman Deepak Bhatta, who is currently in detention in connection with a money laundering probe.
A study report made public by the Securities Board of Nepal (SEBON) had identified connections between Bhatta and Golchha. The report states that Golchha assisted in the payment of funds for Bhatta’s transactions.
What does the report say?
SEBON’s study shows that Bhatta and other business people associated with him colluded to buy shares and artificially inflate their prices. This is one of many allegations of financial misconduct against Bhatta.
According to the SEBON report, Bhatta was found to have purchased shares of Nepal Reinsurance and debentures of Nabil Bank, NMB Bank, Nepal SBI Bank, and Siddhartha Bank worth Rs 3.8 billion.
It was discovered that he used Himalayan Reinsurance (Himalayan Re), where he has investments, and its subsidiary companies to conduct these trades. The report mentions that transactions were also carried out through Guardian Micro Life Insurance, Crest Micro Life Insurance, Protective Micro Insurance, and Liberty Micro Life Insurance – all of which have Himalayan Re investments.
Furthermore, the investigation revealed that funds from a mutual investment fund of Himalayan Investment Banker Limited (owned by Bhatta) were also used for buying and selling shares.
According to the report, the same IP address was used to carry out share transactions through almost all of these companies.
By trading among themselves, they were found to have inflated the prices of Nepal Reinsurance shares and the debentures of Nabil Bank, NMB Bank, Nepal SBI Bank, and Siddhartha Bank.
The study found that Subhi Agrawal (wife of Sulav Agrawal), and businessmen Raj Bahadur Shah, Rishiraj More, and Rohit Gupta also helped inflate the transaction prices through Bhatta.
Meanwhile, the study specifies that Golchha assisted in facilitating the payments for these transactions.
According to the report, most of the transactions were conducted on credit. It states that brokerage firms are owed Rs 4.78 billion from Bhatta and his associates, while they themselves owe Rs 4.47 billion to the brokers.
