The Commission for Investigation of Abuse of Authority (CIAA) on Sunday filed a Rs386.7 million corruption case against a company and 11 people, including Chief Secretary Baikuntha Ayral, at the Special Court over their alleged involvement in irregularities related to the printing of excise duty stickers.

In the history of Nepal’s civil service, this is the first time a corruption case has been filed against a sitting chief secretary. With this, Chief Secretary Aryal has automatically been suspended from the position, in line with Section 33 of the Prevention of Corruption Act, 2002.

“When a public servant is detained in relation to a case, he shall ipso facto be suspended for the period of detention, and if a case is filed against him/her, s/he shall ipso facto be suspended until the proceeding in the case is over,” reads the Act.

Aryal, who became the secretary of the Ministry of Information and Communications on August 9, 2021, had been transferred to the Prime Minister’s Office on March 28, 2023, from where he was supposed to retire. But when then-chief secretary Shanker Das Bairagi resigned from his post to become the national security adviser two days before Aryal’s retirement, it paved the way for Aryal to be appointed the chief secretary, on June 15 last year.

“It is true that a sitting chief secretary has been chargesheeted in a corruption case for the first time in the country’s history,” Bimal Koirala, a former chief secretary told the Post. “Yet the case lodged against him is not related to his deeds as chief secretary, but to his earlier official responsibilities.”

The case implicating Aryal asserts that during his tenure as secretary at the Ministry of Information and Communications, he was responsible for the irregularities in the procurement and handling of excise duty stickers.

The anti-graft body’s statement on Aryal reads: “He, the chairman of the Security Printing Development Committee under the watch of the Secretary of the Ministry of Communication and Information Technology, did not comply with any of the duties assigned to that committee.”

Besides, the statement accuses Aryal of solely exercising the rights of the other seven members of the committee. “The committee did not even approve the Security Printing Centre’s policy, budget and programme for the fiscal year 2022-23.”

The CIAA statement charges Aryal with using power without the committee’s authorisation and without a legal basis as the ministry secretary, and directly supporting the Centre’s executive director to carry out illegal work.

Chief Secretary Aryal, joint secretaries Ritesh Shakya and Tanka Pandey, undersecretary Ganesh Bikram Shahi and section officer Rabindra Paudel have also been named as defendants in the case.

Then executive director of Security Printing Centre, Bikal Paudel; then accounts officer Bishnu Prasad Gautam; former section officer Hari Ballabh Ghimire and former consultant at the Centre, Shakti Prasad Shrestha; as well as former director of National Information Technology Centre Safal Shrestha have been chargesheeted. Printcell Pvt Ltd and its proprietor Keshav Sharma have been named as defendants.

The CIAA has sought to recover the embezzled amount and Rs68.44 million that has already been paid for printing stickers to be recovered from the defendants.

The anti-graft body said in a statement that proceeding with the purchase of excise duty stickers was contrary to the performance agreement between the Secretary of the Ministry of Communication and Information Technology (first party) and the executive director of the Security Printing Centre.

“And the Security Printing Centre proceeded with the work contrary to the provisions mentioned in the approved procurement master plan and the performance agreement,” reads the statement released after the lodging of the case against Aryal and the company

“The process to purchase excise duty stickers, which are highly sensitive and directly related to the nation’s economy, proceeded with an agreement to print and receive them through a private company.”

The statement also says that the Security Printing Centre was supposed to train its manpower, and buy paper and toner/ink for printing excise stickers from its own budget. But the Centre failed to do so.

The anti-graft body further states: “It was seen as unethical to contact the private sector without the approval of the specification and design of the official body.”

Aryal, who is being investigated by the CIAA in the case of the Nepal Telecommunication Authority's purchase of Telecommunication Traffic Monitoring and Fraud Control System (Teramocs) equipment, was also being probed for ‘improper’ and ‘suspicious’ financial transactions in the Security Printing Centre and the purchase of excise stickers.

On September 20, 2022, the Security Printing Centre under the Ministry of Communications called bids to print excise duty stickers for the Inland Revenue Department.

Printcell Pvt Ltd received the excise duty sticker printing contract on December 12, 2022. The company and the Centre agreed to print 433.2 million excise stickers at the rate of 89 paisa per piece.

Earlier, the sticker would cost 25 paisa apiece. At this rate, the total cost of printing stickers comes to Rs108.3 million. However, the contract mentions a price that is fourfold high.

Printcell had signed an agreement to buy only paper and ink. The Centre was supposed to do the printing, and the contract was given to Printcell at an unusually high price. The company was given Rs50 million in advance.

When the contract was awarded, Aryal was the secretary at the information and communication ministry, and Paudel was the Security Printing Centre’s executive director. The secretary chairs the Security Printing Development Committee tasked with preparing policies, plans and budget for security printing.