Kasturi Multipurpose Cooperative based in Beni of Myagdi district has come under scrutiny after it was revealed that the cooperative’s savings were allegedly misused by its chair Rajesh Shakya and his family members using forged documents.

Investigation showed Shakya’s family took loans amounting to 91 percent of the total savings deposited in the cooperative without providing any collateral.

Shakya’s wife, brother, two sisters, and a nephew have reportedly borrowed over Rs479 million, which constitutes the bulk of the total loans disbursed by the cooperative. The cooperative disbursed a total loan of Rs520 million, of which 91 percent has been taken by Shakya’s family members. As a result, nearly 1,100 depositors have been robbed of their savings.

The financial irregularity came to light a year ago when 27 depositors requested return of their money, prompting an investigation. However, a year after that, no concrete actions have been taken against those involved in the wrongdoing. A report from the investigation committee points to Shakya himself being involved in using the money, although the loans were taken by his family members.

Shakya, who is also a local leader of the ruling CPN-UML, has denied any wrongdoing. Meanwhile, Lok Bahadur Pun, the cooperative’s manager, is currently in police custody for his involvement in the misappropriation of Rs1.49 billion in another cooperative in the same district.

The investigation into the Kasturi Cooperative began under the leadership of Beni Municipality Mayor Surat KC in 2024, and despite the revelation of financial irregularities, there has been no action to recover the embezzled funds or prosecute those responsible. Mayor KC, who is also affiliated with the ruling CPN-UML, has been reluctant to take further action, citing a lack of formal complaints. “Our investigation also concluded that there has been the embezzlement of the funds; however, no actions were taken against him as no one has formally registered any complaint,” the mayor said.

The Chief District Officer of Myagdi, Gurudatta Dhakal, also replied in the tone of indifference and said that the issue had not surfaced before as there had been no official complaint regarding the irregularities.