Police have completed their investigation into alleged irregularity while leasing out Nepal Trust land at Durbarmarg to Thamserku Trekking Pvt Ltd, a company under the Yeti World, for 30 years and submitted a report recommending prosecution.

Ram Hari Sharma Kafle, chief of the District Government Attorney’s Office, Kathmandu, said the report prepared by the Central Investigation Bureau (CIB) has been received and is under review. “We are studying the file and will register a case in court soon,” he said.

Police began the investigation after arresting former joint secretary Lekh Bahadur Karki on November 7 and former secretary Arjun Karki on November 16, accusing them of fraud and criminal breach of trust by approving a contract that allegedly caused losses to Nepal Trust. Investigators later added organised crime charges. The probe was expedited after former secretary Karki filed a habeas corpus petition.

CIB has recommended that Karki duo and Thamserku Trekking’s operator Lakpa Sonam Sherpa be named as defendants. An arrest warrant had been obtained against Sherpa, but he secured an interim order from the Patan High Court against his arrest. CIB has filed a petition to vacate that order.

An investigating officer said Sherpa’s statement could have revealed further links, but the court order limited further action. Police have proposed claiming losses equivalent to the difference between Thamserku’s original bid and the reduced amount later accepted, which they say violated procurement law.

Nepal Trust’s board first approved plans on August 13, 2014, to lease one ropani 14 aana of land at Durbarmarg. About two years later, a public tender was issued. Thamserku submitted a bid of Rs6.26 billion. However, on March 7, 2017, the company sought to revise the bid to Rs1.40 billion, citing the inability to pay the earlier amount.

Investigators say Thamserku lowered its bid after learning that the second-ranked bidder, Saakha Steel Industries Pvt Ltd, had offered Rs622.46 million, while the third bid was offered at Rs262.8 million.

After Thamserku was invited for agreement based on its Rs6.26 billion bid, its application to revise the amount reached Nepal Trust’s legal division. Then under-secretary Purushottam Khatiwada recorded a note on April 2, 2017, recommending forfeiture of the bid security, citing provisions of the Public Procurement Act, 2007. CIB has included this note as evidence.

The note stated that the Section 23 (8) of the Act has a provision that if any arithmetical error is found in a bid in examining bids pursuant to Section 22, the Public Entity may correct such an error, and where, in making such correction, there exists a discrepancy between unit rate and total amount, the unit rate shall prevail, and the total amount shall be corrected as per the same rate.

However, after performing an arithmetic check on the rates presented in the proposal, it was noted that the total amount in the financial proposal submitted by Thamserku Trekking Pvt Ltd would be maintained at Rs6.45 billion in the revised form. It was also mentioned that the concerned company had been informed about this through a letter allowing them to enter into the agreement.

In this context, according to Section 21(2b) of the Public Procurement Act, if the bidder does not accept the correction of the arithmetic error shown in the bid, the company’s bid security may be forfeited, stated the remarks presented by Khatiwada. Based on this note, the CIB had arrested Undersecretary Karki over allegations of leasing land on Durbar Marg at a low price.

During questioning, former joint secretary Lekh Bahadur Karki said he acted on instructions from then secretary Arjun Karki. Police found that the secretary had formally directed the joint secretary to process Thamserku’s application. The 2017 Auditor General’s report had also flagged the decision as irregular and called for an investigation.

Officials said the revised proposal submitted after the application lacked proper seals and signatures, indicating haste and procedural lapses.

The Durbarmarg lease has previously been the subject of complaints to Nepal Police and the Commission for Investigation of Abuse of Authority, which decided in 2019 not to pursue the case. After the latest probe began, Thamserku issued a statement denying it had proposed Rs6.26 billion, with Sherpa questioning the logic of paying such an amount for leasing the land.

The land, previously owned by former king Birendra and his family, was transferred to the state after the republic was established. Nepal Trust was formed in November 2007 to manage such properties in the national interest under the Nepal Trust Act, 2007.