Police on Friday arrested Om Prakash Gurung and Durga Pandey Chapagain on charge of embezzling more than Rs1 billion of depositors of a cooperative.

Gurung, the chairman of the Butwal-based Supreme Saving and Credit Co-operative, and Chapagain, a manager at the cooperative, have been accused of embezzling Rs1,078,267,729 of savings deposited by over 10 thousand depositors of the Gitendra Babu (GB) Rai-led cooperative.

According to Deputy Superintendent of Police Bijay Raj Pandit, police arrested them based on the reports prepared by the Registrar’s Office of the Cooperatives of the Lumbini Province and complaints lodged by the agitating depositors.

“Gurung was arrested on Thursday while Chapagain was taken into police custody on Friday,” Pandit said. “Details regarding the collection of the amount, status of the loan investments and embezzlement of the money are being studied.”

The International Criminal Police Organisation (INTERPOL), on January 28, had issued a diffusion notice against GB Rai, who is also the founding chairman of Pokhara Suryadarshan Savings and Credit Cooperatives, who has been accused of embezzling over Rs1 billion. He has been on the run.

As per police investigation, it has been found that Rs79.5 million from the Butwal-based cooperative was provided to five different companies where Rai is the chairman.

A complaint has been lodged at the Kaski district police office accusing 19 individuals, including GB Rai, of embezzling over Rs1 billion deposited by people at the cooperatives. The case is under investigation.

The police had also got an arrest warrant from Kaski District Court against them last year. Suspecting that they were hiding somewhere in Kathmandu Valley, the district police wrote to its head office seeking its support to arrest them. So far, the police have arrested Kumar Ramtel and two other individuals while 16 other accused persons are still at large.

Rai also co-founded Galaxy Television jointly with popular television journalist Rabi Lamichhane, who is now chairman of Rastriya Swatantra Party. Lamichhane, who was managing director of the media company, later quit the television, subsequently formed the party and won election for a federal parliament seat from Chitwan.

The television channel shut down its operations recently.