The Ministry of Home Affairs is preparing to press ahead with the supplementary complaint filed a few months ago at the district police office in Kaski against Rabi Lamichhane, the president of the Rastriya Swatantra Party (RSP), officials at the home ministry said.

The district police of Kaski had registered a supplementary case against then-deputy prime minister and home minister Lamichhane for his alleged involvement in the misuse of funds of the Pokhara-based Suryadarshan Cooperative. Despite accepting the supplementary complaint from the cooperative victims, the police at the time hadn’t acted.

“Even though a supplementary complaint was filed against Lamichhane with Kaski Police, nothing was done about it,” an official at the home minister’s secretariat told the Post on condition of anonymity. “But after a Cabinet meeting decided to own the report of the parliamentary probe panel on cooperatives scam, Home Minister Ramesh Lekhak ordered the police headquarters to take necessary action on that supplementary charge.”

He said a team of police had reached Pokhara to take up the matter. The official, however, didn’t provide any details about the team.

But another official at the home ministry had a different take on the matter.

“The home minister doesn’t need to ask Nepal Police to take action if the probe panel report comes to the home ministry,” Dil Bahadur Tamang, information officer at the ministry, told the Post. “But whether the report has arrived at the ministry—I cannot confirm right now.”

The parliamentary special inquiry committee formed to probe cooperatives scam submitted its 1,124-page report to the House of Representatives on Monday. Speaker Devraj Ghimire forwarded the report to the government. A Cabinet meeting on Thursday decided to own the report and directed the responsible ministries and agencies to take necessary actions to implement it.

Meanwhile, the district police of Kaski say they are investigating the misuse of funds deposited at Suryadarshan Cooperative, a case in which Lamichhane is also linked.

“Though it is not individual-specific, the Kaski police have been investigating the misuse of deposits of Suryadarshan Cooperative,” Basanta Kumar Sharma, the spokesperson of Kaski district police, told the Post.

Sharma denied getting any order from police headquarters to take action on the supplementary charge.

The report of the panel concluded that Gitendra Babu (GB) Rai, who led several cooperatives, channeled money from these cooperatives to Gorkha Media Network that ran the now-defunct Galaxy 4k Television. Rai and Lamichhane co-founded and jointly ran the media company. The panel’s report said Lamichhane was also involved in the misuse of cooperative funds.

Retired deputy inspector general (DIG) of Nepal Police Hemanta Malla said there is a need for further investigation on whether all the funds collected from the cooperatives were spent on the Gorkha Media Network or used in other sectors as well.

The parliamentary special committee had a jurisdiction to probe only a certain number of cooperatives.

“When the police investigate this issue, the finding could be different to that of the probe panel,” Malla told the Post. “There are chances that Lamichhane and his business partner Rai had invested cooperatives’ money outside the media company.”

The probe panel report stated that over Rs650 million of cooperative funds were invested in Gorkha Media Network, but the report is not clear whether deposits from the cooperatives were used in the media company alone, Malla said.

However, the parliamentary committee’s report will be useful for further police investigation, he added.

“Lamichhane was at the company as an employee, but the managing director with share equity, so he was responsible for the misuse of funds routed there from the cooperatives,” Malla said. “For this, he can be booked under the Company Act, among other legal provisions.”

Based on the findings of the parliamentary special inquiry committee, legal experts say Lamichhane could face prosecution under four different laws.

“Lamichhane could be charged with the cooperative fraud case under the Cooperative Act, fraud and duping under the National Penal Code, organised crime cases under the Organised Crime Prevention Act, and money laundering case under the Prevention of Money Laundering Act,” advocate Om Parkash Aryal told the Post.

But some lawyers differ. They claimed that not all the staff, shareholders, and board members are liable for the loan taken by the company from banks and cooperatives. Only if they have given personal guarantee can the guarantor be considered guilty, said a lawyer.

“Since Lamichhane cannot be directly linked to the rerouting of the cooperative fund to Gorkha Media Network, the case does not attract cooperative laws,” Gandhi Pandit, a corporate lawyer, told the Post. “The loan is in the name of a company, which is a legal entity. A legal entity cannot work for itself; therefore, it needs staff, shareholders, and board members. But they cannot be proven guilty when the company is bankrupt.”

But Pandit said Lamichhane is not completely innocent. He can be investigated under the Company Act 2006’s Articles 160 and 161. Both articles discuss the fiduciary duties of the company’s responsible persons. If the chair or the managing director of the company works for personal interest, which causes loss for the company's shareholders, the chair or the managing director can be booked under the law.

However, Pandit argues that shareholders should lodge a complaint for that, which is not so in Lamichhane’s case. “The parliamentary special probe report has demanded further investigation,” he said. “Further investigation does not mean guilt.”

Former attorney general Raman Shrestha, however, sees attempts at politicisation of the issue.

“If the political parties take action against Lamichhane, he can be booked under multiple laws, as per the report of the parliamentary special probe panel,” Shrestha told the Post. “Apart from being the company’s staff, Lamichhane was also a board member in the capacity of managing director. Therefore, he cannot say he was unaware about the source of money invested in the company.”

Without being specific regarding the laws that are attracted to Lamichhane’s case, Shrestha also expressed doubts about the state agencies.

“While many people are behind bars for misusing the passports, Lamichhane’s passport case is pending, probably because of a tacit understanding among the politicians,” Shrestha said. “Whether Lamichhane will be behind bars this time around will also be determined by if the Central Investigation Bureau of Nepal Police will be allowed to freedly do its job.”