Committee files motion to vacate Supreme Court ruling on Sudhir Basnet’s housing projectThe Problematic Cooperatives Asset Management Committee filed a motion to vacate before the Supreme Court on Monday requesting it to annul its March 29 interim order allowing promoter Sudhir Basnet of troubled Oriental Cooperative to complete his Vegas City housing project to pay off his creditors.
The Problematic Cooperatives Asset Management Committee filed a motion to vacate before the Supreme Court on Monday requesting it to annul its March 29 interim order allowing promoter Sudhir Basnet of troubled Oriental Cooperative to complete his Vegas City housing project to pay off his creditors.
Rewati Raman Pokharel, spokesperson for the committee which wants to auction Basnet’s assets, said they filed the motion to vacate to prevent him from prolonging the suffering of the scam victims. “Basnet is black listed and has lost the trust of prospective lenders, and he might not be in a position to generate additional funding to complete his unfinished project,” Pokharel said.
Oriental Cooperative went bankrupt in 2013 after it disbursed loans haphazardly and allowed its key promoter Basnet to illegally invest depositors’ funds in the real estate market which later crashed. The Problematic Cooperatives Asset Management Committee was formed to identify and
liquidate the assets owned by Basnet, the kingpin in what is possibly the largest scam in the cooperative business. The committee has received complaints from 7,545 applicants.
The seven-member panel formed last year has estimated the total liabilities of Oriental at Rs17 billion. This includes monies owed to Oriental depositors and apartment buyers along with outstanding taxes and loans and interest to banks and financial institutions. Basnet has been demanding that he be allowed to complete 573 apartments in the property located in Balkumari, Lalitpur. As per committee officials, Basnet has been claiming that his creditors will get only a small amount in compensation if the property is auctioned.
Committee officials said that Basnet was still trying to convince the depositors that he would settle his debts with the money received from the sale of the housing project. The committee said it did not believe Basnet and wanted to auction off the property. On April 3, the police arrested Basnet on the charge of cheating Oriental depositors. He was released last Monday after his wife filed a writ of habeas corpus with the Supreme Court.
According to Pokharel, the committee plans to pay Oriental’s creditors with the money received by auctioning off Basnet’s property. “As we are not mandated to construct the project, we will distribute the money proportionately to the actual victims,” he said.
The victims of Oriental Cooperative also expressed doubts over Basnet’s pledge to settle their dues by constructing the project himself. “We will accept the compensation to be provided by the government committee,” said Nirmal Gautam, a victim living in Battisputali, Kathmandu.
Basnet owned 14 housing colonies and apartment buildings and hundreds of ropanis of land in the Kathmandu Valley. A number of banks have recovered their dues by auctioning the collateral. The government has declared 10 cooperatives including Oriental as ‘troubled’. The committee is in the process of collecting claims from the other nine cooperatives.
Several savings and credit cooperatives have fallen into financial problem mainly by failing to implement good governance practices. There are more than 35,000 cooperatives out of which 13,500 are financial cooperatives. They have mobilised deposits of around Rs300 billion.