Nepal’s authorities have frozen the passport of businessman Ajeya Raj Sumargi after launching a fresh investigation into alleged money laundering and the origins of billions of rupees transferred into the country through offshore companies.

According to sources, the Department of Immigration suspended Sumargi’s passport on Tuesday following the request by the Department of Money Laundering Investigation (DoMLI).

The move comes as investigators revisit long-standing allegations regarding the legality of Sumargi’s wealth. The DoMLI had previously investigated complaints against him and concluded that there were grounds to question the legitimacy of some of his assets, but the case did not advance further at the time.

“Sumargi’s passport was suspended three days ago at the request of the department,” a source at DoMLI said.

The department first began examining Sumargi’s financial dealings over eight years ago. After finding irregularities during an initial review, it launched a detailed investigation in 2018.

At the time, investigators concluded that the source of funds Sumargi had brought, or intended to bring, into Nepal from abroad could not be established. Preliminary findings by the DoMLI, Nepal Police’s Central Investigation Bureau (CIB) and other agencies termed the transactions suspicious and submitted a report to the department’s director general.

The investigation focused on approximately Rs3.5 billion transferred from abroad. The Nepal Rastra Bank, the country’s central bank, had already classified those funds as suspicious. Because Sumargi was unable to provide documentation establishing the lawful source of the money, the central bank froze deposits held in several commercial banks.

Banking sources said Sumargi later withdrew those funds after 2018. However, investigators noted that he had already withdrawn another Rs8.5 billion that had entered Nepal before 2017.

Investigators found that much of the money originated from companies registered in jurisdictions widely regarded as tax havens, particularly Cyprus and the British Virgin Islands.

According to the DoMLI’s preliminary report, the largest inflows came from Airbell Services Ltd, a Cyprus-based company, and Zhodar Investments Ltd, registered in the British Virgin Islands. By 2017, Sumargi had reportedly transferred a total of US$118.396 million into Nepal through various channels.

Documents released in January 2019 by the Centre for Investigative Journalism Nepal (CIJ Nepal) and the International Consortium of Investigative Journalists (ICIJ) identified Sumargi as having an investment in Airbell Services.

The “Nepal Leaks” investigation said the company, registered in 2008 and located at Magnum House in Cyprus, remained active. Investigators argued that the company was used as a vehicle to channel funds into Nepal under the guise of foreign investment.

The DMLI’s findings showed that between 2008 and 2013, Sumargi transferred US$63.19 million into his Nepali companies through nine separate transactions from Airbell Services alone.

Investigators also identified nearly US$60 million transferred from several other foreign companies.

A preliminary report prepared by the DoMLI in December 2017 concluded that the funds were illicit.

Sumargi has consistently maintained that the money constituted legitimate foreign investment. However, investigations uncovered links between him and several offshore entities involved in the transactions.

Records showed that on May 12, 2010, the offshore law firm Trident Trust registered Zhodar Investment Ltd in the British Virgin Islands. Investigators said Sumargi was one of the company’s investors, alongside Arjun Sharma, a director of Mukti Shree Pvt Ltd, a company associated with Sumargi.

According to investigators, Sumargi transferred US$48.37 million into Nepal through 26 transactions from Zhodar Investment without obtaining the required approval for foreign investment.

On November 22, 2013, Zhodar Investment reportedly transferred 1,060 shares to Worldwide Incredible Ltd, another company registered in the British Virgin Islands. The same company became a shareholder in Airbell Services on the same day.

CIJ Nepal and the ICIJ previously reported that Sumargi was the beneficial owner behind those entities.

Separate investigations also found that Sumargi brought money into Nepal as purported foreign investment through companies linked to Niraj Govinda Shrestha and Michel Abdo, the brother of Romeo Abdo. Romeo Abdo is a businessman of Lebanese origin operating in Belarus since 1997.

Reports identified a British Virgin Islands company called Nostal Business Corp, registered in the names of Michel Abdo and Shrestha.

Authorities have also previously linked Sumargi to tax evasion.

According to the 54th Annual Report of the Office of the Auditor General, Sumargi evaded taxes amounting to Rs955 million in one instance and Rs453.8 million in another.

The report concluded that he avoided a total of approximately Rs1.41 billion in taxes through transactions involving the sale of shares between companies operating in Nepal and abroad.