The Department of Money Laundering Investigation is preparing to file a case against Yogendra Shrestha, former executive chairman of Nepal Share Market and Finance Limited, at the Special Court on charge of laundering Rs2.66 billion.

It will be the largest money laundering case ever taken up by the department, according to a senior official.

“The department officials had reached the court to file the case on Tuesday but they returned without doing so, as there were delays caused by bank-related paperwork,” said Indra Kumar Khadka, an information officer at the Special Court. “The case is likely to be filed on Wednesday.”

Shrestha had earlier faced a banking offence case and had served a brief time in jail.

“As the money earned through the banking offence was invested in land and stock markets, we are filing a case against him on charge of money laundering,” said Rup Narayan Bhattarai, director-general of the department. 

“We are demanding confiscation of the amount Shrestha is accused of laundering and a fine double that amount.”

This will mean the department is seeking a total of Rs7.98 billion from Shrestha.

While serving as the executive chairman of Nepal Share Market and Finance Limited, Shrestha had embezzled Rs 2.66 billion by creating fake loanees, according to a due diligence audit report.

A probe carried out by the central bank had found that Shrestha had created 96 bogus borrowers to embezzle the amount.

The probe had also revealed that Shrestha had taken loans from his own company in the name of fake loanees and transferred the money to the accounts of his son and wife.

The amount was then used to purchase rights shares for him and his relatives.

The deposits of the Nepal Army, Citizen Investment Trust, Himal Hydro and Beema Sansthan, among others, were embezzled.

Shrestha had also faced charges of lending Rs 1.57 billion without collateral and valid documentation, using Rs 880 million for personal purposes and illegally lending Rs 204.9 million to the board of directors.

After the irregularities in the company were exposed, an arrest warning was issued against absconding Shrestha in April 2011.
Shrestha was arrested from Mahendranagar in Kanchanpur in September 2011. He was charged with committing a banking offence. 

In April 2012, the central bank declared Nepal Share Market and Finance Limited a crisis-ridden institution. At the time, the company’s net worth was negative by Rs1.59 billion and its cumulative loss was as high as Rs3.7 billion.