High-ranking H&B officials sucked in as probe deepens

KATHMANDU, JAN 15 -

High-ranking officials of H&B Development Bank are being sucked in as the police probe deeper into a good for payment cheque scam. Police had arrested another eight employees of the development bank including immediate chief operating officer Mahesh Bhusal and finance head Nirmal Nepal who have been subsequently suspended. Nepal is the brother of the chief accused Niraj Nepal, the Kuleshwor branch manager, who is in police custody.’

The manager of the Kuleshwor branch of H&B has been charged with issuing good for payment cheque s to two traders despite insufficient funds in their accounts, resulting in losses to the bank running into millions.

Other officials who have been rounded up by the police are branch officer Parsuram Devkota, senior assistant Rima KC, assistants Manisa Poudel and Binas Dangol, office secretary Binod Acharya and Yek Narayan Devkota. The traders involved in the fraud Manoj Chaurasia and Jaya Kumar Yadav are at large.

On Sunday, they were remanded in custody for four days by the Appellate Court, Patan to enable the police to conduct further investigations. A police official at Metropolitan Police Range, Hanuman Dhoka said they had arrested them on the basis of the statement of Niraj Nepal.

“Following the arrest, an initial statement has been taken from them. The government lawyer will take their statements on Tuesday,” said the police official. An official at the Central Investigation Bureau (CIB) of Police, which is investigating the case, said that more bank employees were arrested after they were found linked in the fraud case.

As a result of the scam, the bank incurred a cash loss about Rs 200 million and it is receiving a claim for over Rs 500 million for good for payment cheque s.

H&B has submitted a report of its internal investigation to Nepal Rastra Bank which has mentioned how the fraud took place, the amount involved  and the bank’s liabilities, said a central bank official.

The bank’s internal investigation has found that chief accused Nepal issued good for payment cheque s in the name of Chaurasia and Yadav after they collected deposits from other individuals in their accounts. But the bank failed to withhold the amount after issuing good for payment cheque s which resulted in the withdrawal of all the money they had deposited.

Moreover, it has been found that a number of finance companies and cooperatives accepted the good for payment cheque s as collateral and provided loans to the fraudster duo Chaurasia and Yadav.

According to H&B officials, Chaurasia is a regular borrower of H&B while Yadav is just a depositor. The finance companies and cooperatives issued credit to Chaurasia and Yadav despite the central bank’s ban on providing loans against cheque s.

For this reason, the central bank has suspected that there is a racket involved in the incident and has frozen the bank accounts and shares of those involved including Niraj Nepal and senior officials of the financial institutions involved in providing the loans.

Meanwhile, the persons who have deposited money in the accounts of Chaurasia and Yadav enticed by high interest rates are in trouble now. They have been picketing the offices of H&B Development Bank and Nepal Rastra Bank demanding that the good for payment cheque s they had been given be cashed.

H&B and the central bank have told them that it will be possible to cash the cheque s only after the police investigation is completed. “After completion of the police investigation, we will make payment for genuine cheque s as per the central bank’s directive,” said H&B CEO Jasoda Sainju.