The Central Investigation Bureau (CIB) of Nepal Police has arrested Guna Group chairman Rajendra Shakya in connection with its ongoing investigation into Prabhu Bank chief executive officer (CEO) Ashok Sherchan, the CIB said in a statement on Tuesday.

Shakya has been taken into custody as part of the wider probe centred on allegations linked to Prabhu Management and associated companies, according to the CIB.

The arrest comes after the CIB earlier detained the bank’s CEO Sherchan along with two others as investigators examine suspected financial irregularities.

Recently, a case was registered at the Kathmandu District Court against Prabhu Management founder Deviprakash Bhattachan and director Kusum Lama, accusing them of defrauding multiple cooperatives across the country by failing to reimburse remittance and deposit guarantee payments.

Guna Group has investments across real estate, housing, cinema halls, motor parts, and commercial buildings.

Further details of Shakya’s alleged involvement are yet to be disclosed as the investigation continues.