Nepal’s Department of Money Laundering Investigation has recommended prosecuting 29 individuals, including businessmen Deepak Bhatta and Sulav Agrawal, on charges of money laundering linked to alleged illegal share transactions and the misuse of funds amounting to nearly Rs20 billion.

According to an official at the Kathmandu District Government Attorney’s Office, the department has recommended filing cases against Deepak Bhatta, chair of Infinity Holdings; Sulav Agrawal, chair of Jagdamba Holdings; his wife Subhi Agrawal; Shankerlal Agrawal, chair of the Shanker Group; Shahil Agrawal, chair of the Jagdamba Group; and Shekhar Golchha, former president of the Federation of Nepalese Chambers of Commerce and Industry.

The recommendation also names Raj Bahadur Shah, managing director of the Jawalakhel Group; Upasana Poudel, chief executive officer of Himalayan Reinsurance; Rohit Gupta, vice-chair of Ramesh Corp; businessmen Rishiraj More and Sandeep Chachan, among others.

Officials associated with the department, police and the government attorney’s office said the investigation report had already been submitted in the third week of April. The report is currently under review.

“The review is almost complete. The case will probably be filed next week,” one official involved in the process said. “The accused are being prepared to face charges under laws governing insurance, securities and share trading. Prosecutors are seeking prison terms ranging from two to 10 years, fines equivalent to the alleged embezzled amount and confiscation of assets with unexplained sources.”

The department arrested Sulav on April 3 and Bhatta two days earlier on April 1. Shankerlal Agrawal, Sulav’s father and chair of the Shanker Group, was arrested on April 2. He was released on a recognisance bond after two days in custody. Bhatta and Sulav remain in detention.

Golchha was also arrested during the investigation but was later released following an order from the Supreme Court. Other accused individuals are reportedly absconding.

According to the department, the group illegally diverted around Rs3.73 billion from five companies, including Himalayan Reinsurance, and used the funds to purchase shares in competing companies.

Somkanta Bhandari, chief district attorney and joint attorney general at the Kathmandu District Government Attorney’s Office, confirmed that the report had been received and was under review, but declined to disclose the names of those recommended for prosecution.

The department said the accused were investigated for allegedly committing acts prohibited under sub-sections a, b, c, and d of section 3 (1) of the Money Laundering Prevention Act, 2008. Investigators allege they concealed and disguised the illegal origin, nature and ownership of assets obtained through offences, including violations under Section 140 of the Insurance Act, 2022, by investing the proceeds in the securities market and other sectors.

Kantipur has already spoken to around 10 people with direct knowledge of the case and published details of the scheme. According to sources involved in the matter, around the beginning of the current fiscal year, Shekhar Golchha, chairman and managing director of the Golchha Group; Rohit Gupta of Ramesh Corp; Raj Bahadur Shah of Jawalakhel Group of Industries; Deepak Bhatta of Infinity Holdings; and Rishi Raj More of Lucky Group had agreed to collectively trade shares for business purposes.

Under the agreement, all parties pooled money into a single account through the banking system, and some shares were subsequently purchased through the fund.

The investigation initially began after allegations that Bhatta had embezzled Rs3.738 billion from listed companies, including Himalayan Reinsurance, Himalayan Securities Banker, HLI Large Cap Fund and Nepal Micro Insurance, in violation of securities laws.

Regulatory agencies began investigations after the Gen Z movement. The bank accounts of both Bhatta and Sulav were frozen shortly after the movement and remain frozen.

Investigators say Bhatta and his associates violated money laundering laws by misusing funds from listed companies for share trading. Letters sent by the department to the Nepal Insurance Authority, Securities Board of Nepal, Nepal Stock Exchange and CDS and Clearing Ltd seeking details of Bhatta’s share transactions also support that conclusion. Kantipur obtained some of those letters.

During the investigation, the department collected information from Nepal Rastra Bank, the Securities Board of Nepal, Nepal Insurance Authority, Nepal Stock Exchange and CDSC. Officials analysed and verified the data, recorded statements from stakeholders and prepared the final report.

According to investigators, funds from five companies were used, in collusion with Sulav, vice-chairman of the Shanker Group, to purchase a large volume of shares in Nepal Reinsurance Company.

Bhatta purchased shares through Bhrikuti Stock Broking Company Pvt Ltd, a brokerage firm licensed as broker number 55. The money used for the purchases had allegedly been collected from various companies without subsequent repayment, prompting complaints that led the Department of Money Laundering Investigation to launch its probe.

Officials involved in the investigation said all transactions were conducted from Sulav Agrawal’s office.

“Bhatta and his group had been aggressively buying Nepal Reinsurance shares from the secondary market over the past few months,” one official said.

According to the official, the scheme had two objectives. The first was to establish dominance over Nepal Reinsurance Company ahead of its planned rights share issuance and weaken a competing company. The second was to eventually merge Nepal Reinsurance with Himalayan Reinsurance or establish strong market control after weakening Nepal Reinsurance.

Bhrikuti Stock Broking had also sold shares belonging to other companies held in the name of Himalayan Reinsurance. However, the broker allegedly failed to transfer the proceeds from those sales to Himalayan Reinsurance. Instead, the money was allegedly used to buy Nepal Reinsurance shares in the name of Deepak Bhatta.

After failing to receive the money, Himalayan Reinsurance filed a case last week at the Kathmandu District Court against Bhrikuti Stock Broking Company, demanding recovery of the amount owed.

Bhatta, however, has maintained that Sulav carried out the transactions without his knowledge. In a statement to investigators, Bhatta claimed he was unaware that the broker had purchased shares in his name. He said the broker had provided his online trading login credentials and password to Sulav, who then misused them.

Bhatta also told investigators that an agreement between him and Bhrikuti Stock regarding margin trading remained secure. However, at the time of the transactions, until mid-July 2025, no broker had received regulatory approval to formally provide margin lending services for share purchases. That means the margin trading arrangement claimed by Bhatta itself appears to have been illegal.

A report submitted by the Securities Board of Nepal to investigating authorities also found that, along with Bhatta, Subhi Agrawal, Raj Bahadur Shah and Rishi Raj More had engaged in credit-based share trading.

According to the report prepared at the request of the money laundering department, the transactions were linked to the business partnership between Bhatta and the Shanker Group. The report states that Subhi Agrawal, Shah and More also bought shares through Bhrikuti Stock Broking, without advance payment, in violation of the law.

“The report shows that Subhi, Raj Bahadur and Rishi Raj received trading limits without advance payments, failed to fully settle transactions, and obtained shares in their accounts before payment completion,” the report states. “These actions appear to have contributed to artificial increases in share prices and misled investors and the securities market.”

The report concluded that they colluded with Bhrikuti Stock Broking to manipulate the market and artificially inflate share prices, potentially constituting offences under securities laws.

While the Department of Money Laundering Investigation has pursued the money laundering aspect, Nepal Police’s Central Investigation Bureau is conducting a separate investigation into alleged securities offences under the Securities Act, 2007. The probe focuses on accusations of false trading, price manipulation and actions affecting the securities market.

“That case will also be filed soon,” a department official said. “The department has additionally begun investigating possible money laundering activities in other sectors linked to the group. Cases will be filed in multiple areas.”