The Nepali Congress has demanded that the government and ruling parties form a parliamentary panel to investigate cooperative fraud charges against Deputy Prime Minister and Minister for Home Affairs Rabi Lamichhane, or it will obstruct the Parliament.

The main opposition party asked for a parliamentary panel saying it was not satisfied with Prime Minister Pushpa Kamal Dahal’s clarification on the matter. Starting last week, the largest party had been pressing for his clarification over Lamichhane’s alleged involvement in the fraud involving millions of rupees.

Appearing before the Parliament on Tuesday, Dahal said there is no evidence to implicate his home minister in the fraud case. He said after minutely studying police investigation into the fraud at the Pokhara-based Surya Darshan Cooperative, he can confidently assert that Lamichhane is clean.

“So far, no investigation suggests he was ever involved in the cooperative in any role, nor has he been named in the case, which is sub-judice,” said Dahal. “As he has already cleared the loan, the police have briefed me that no further investigation is needed against him.”

Dahal, however, said there would be no leniency in taking action against Lamichhane if evidence of his involvement in the fraud emerges. “There will be no compromise in upholding good governance. Nobody, from any party, will be exempt,” he said. “If Lamichhane is involved in the fraud, no force can stop the government from taking action against him.”

He even questioned the Congress, asking whether there could be an agreement in taking action against everyone against whom cases have been filed with government authorities.

When the Congress was still in the government, it had been objecting to the CPN-UML’s demands on sacking three ministers including Mohan Bahadur Basnet, then minister for health and population. Basnet has been under an investigation of the Commission for Investigation of Abuse of Authority for alleged corruption in the procurement of the Telecommunication Traffic Monitoring and Fraud Control System (Teramocs) for the Nepal Telecommunication Authority.

Not satisfied with Dahal’s clarification, the main opposition said either the prime minister was kept in the dark by the investigating authorities or he was not disclosing the facts before Parliament.

“The prime minister said there was no proof to link Lamichhane in the fraud case. I ask what proof he is looking for when there are complaints from the victims, there is evidence of his transactions with the cooperatives and police investigation in the matter continues,” said Ramesh Lekhak, the Congress chief whip. He reiterated his party’s position that Lamichhane’s appointment as home minister, when Nepal Police is investigating his alleged involvement in embezzling cooperative deposits while serving at the Gorkha Media Network, presents a conflict of interest. He also argued that the police organisation, which falls under the jurisdiction of the home minister, cannot undertake a fair investigation.

Victims of cooperative fraud on February 5 had lodged a complaint to the Kaski district police against three people including Lamichhane, who also is the chairperson of the Rastriya Swatantra Party.

A probe by the Pokhara Metropolitan City found that over Rs1.35 billion in public deposits at the cooperative was misappropriated. The probe found that Lamichhane had obtained a loan of Rs10 million from the cooperative by creating a fake account. He has been rejecting the allegations.

Lamichhane, a former television host and managing director of a television channel co-founded by Gitendra Babu (GB) Rai, has been accused of embezzling hundreds of millions of rupees in collusion with Rai from different cooperatives in Kaski, Chitwan and Butwal.

Rai, who was the chairman of the Gorkha Media Network, the mother company of the channel, is accused of illegally transferring Rs300 million from Kaski-based Surya Darshan Cooperative, Rs110.71 million from Chitwan-based Sahara Cooperative, and Rs100.74 million from Supreme Cooperative in Butwal, without providing any collateral.

“The prime minister claims there is no proof against Lamichhane but we see ample evidence to establish his connection,” said Lekhak. “We demand a parliamentary investigation panel to find out the reality. The constitution of such panels has for long been a parliamentary practice.”

Over the years parliamentary teams have been formed to investigate several controversial issues. But most of the time they have been formalities. Most recently, in July 2022, an 11-member committee was formed to investigate charges that the then Finance Minister Janardan Sharma tweaked tax rates with the help of unauthorised persons, a day before he was to present the national budget in Parliament. The panel did not implicate Sharma.

Lekhak said his party doesn’t want to obstruct House proceedings if the prime minister and the ruling parties are serious about its demands. “I urge you to take our concerns seriously. If not, the government would be seen as creating an environment for House obstruction,” he said.

Ruling party leaders, however, accuse the Congress of raising a non-issue and say there is no need for a parliamentary probe into charges against Lamichhane. Talking to journalists after the House meeting, CPN-UML Chairman Oli said, "There is no possibility of forming such a committee."