The Kathmandu District Court on Wednesday granted a bail of Rs6 million to Rabi Lamichhane, chair of the Rastriya Swatantra Party and former home minister, in connection with the Swarnalakshmi Cooperative fraud case. The decision was made by a single bench of Judge Madhav Prasad Adhikari after a pre-trial remand hearing.

The court observed that Lamichhane, despite his denials, “was a shareholder and managing director of Gorkha Media Network Pvt Ltd, a company that received funds from the Swarnalakshmi Multipurpose Cooperative”.

“Lamichhane had testified that the funds transferred to Gorkha Media Network's accounts were not in his knowledge, yet evidence suggests otherwise.”

Lamichhane and 38 alleged accomplices, including Chhabilal Joshi, Gitendra Babu Rai, and Kumar Ramtel, are accused of misappropriating Rs1.199 billion. The charges include allegations that Lamichhane, through his position at Gorkha Media Network, facilitated the transfer of cooperative funds into the company's accounts.

“The accused, including Lamichhane, used cooperative funds for personal gains, such as loans amounting to Rs46,98,000 for a four-wheeler and Rs46,48,000 for an Eco Seven Seater van,” the court said. “Payments from the cooperative were also made via checks signed by Lamichhane.”

In his statement, Lamichhane claimed that he did not take any funds from Swarnalakshmi Cooperative, and denied he was guilty of misappropriation. “The shares I held were obtained through proper channels and later transferred without monetary benefit to me,” he said.

However, the court said, “Evidence shows that the accused held 1,80,000 shares in Gorkha Media Network and played a key role in its financial operations, including opening and managing bank accounts.”

Lamichhane has denied all charges, pledging full cooperation with the investigation.

Police investigations also link him to cooperative fraud cases in other districts, including Rupandehi, Chitwan, and Parsa, alleging a systematic and coordinated effort to embezzle funds.

Tensions erupted outside the court as RSP supporters on Wednesday clashed with senior advocate Dinesh Tripathi, who represented the cooperative victims. Police intervened to prevent further escalation and ensured Tripathi's safety.

The RSP chief had produced himself before the court in Kathmandu on Sunday, three days after his release on bail in similar offences in Pokhara. Kaski District Court had freed Lamichhane last week after the latter’s 84-day police detention in Pokhara.

Lamichhane is accused of misappropriating Rs1.199 billion from the Swarnalaxmi Cooperative alongside 38 alleged accomplices, including key officials of the Gorkha Media Network including former vice chair Chhabilal Joshi, chair Gitendra Babu (GB) Rai, and director Kumar Ramtel. They are accused of illegally diverting the cooperative funds to the media company, which ran the now-defunct Galaxy 4K Television. Lamichhane was managing director of the company before joining politics in June 2022.

The charges include cooperative fraud and organised financial crimes, alleging systematic diversion of funds. Police investigations also link the accused to cooperative fraud in Butwal, Chitwan, and Parsa.

Lamichhane, who was previously released on Rs6.5 million bail by the Kaski District Court in a separate case concerning the Pokhara-based Suryadarshan Cooperative, has pledged full cooperation with ongoing investigations.