A case has been filed at the Kathmandu District Court against four defendants, including former government secretary Arjun Karki, over allegations of fraud linked to a decision to lease out the Nepal Trust’s land in Durbarmarg for 30 years to Thamserku Trekking Pvt Ltd, a company under the Yeti World.

Those charged include former secretary Arjun Karki, former joint secretary Lekh Bahadur Karki, Thamserku Trekking chair Lhakpa Sonam Sherpa and the company itself. The case has been registered on fraud charges based on an investigation by the Central Investigation Bureau (CIB) of Nepal Police.

The CIB had earlier sought to include organised crime and criminal breach of trust charges as well, while submitting its report to the District Government’s Attorney’s Office.

Prosecutors have determined Rs4.86 billion as the claimed amount, alleging the agreement was altered against the company’s original proposal, causing financial harm to Nepal Trust, a government entity. An additional Rs5.324 million has been claimed for allowing the use of road land under plot number 4605.

Investigators have also sought to recover Rs388.45 million from the defendants after construction exceeded the agreed three storeys and went up to five storeys on plot number 4606.

Police arrested former joint secretary Lekh Bahadur Karki on November 7 and former secretary Arjun Karki on November 16 while investigating alleged fraud and criminal breach of trust. They had also obtained a court warrant to arrest Thamserku director Sherpa, who later secured an order from Patan High Court against his arrest. The CIB subsequently filed a petition to vacate that order.

The case begins from the Nepal Trust board decision on August 13, 2014, to lease out one ropani and 14 anna ( 10,267.50 square feet) of land in Durbarmarg. Nearly two years later, a public tender was issued. Thamserku initially submitted a bid of Rs6.26 billion to lease the property at the prime commercial location.

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

When the evaluation committee moved to sign an agreement based on the original Rs6.26 billion bid, Thamserku’s application for a review reached the Trust’s legal division. Then under-secretary Purushottam Khatri had, on April 2, 2017, recommended forfeiture of Thamserku’s deposit. The CIB has presented that document as evidence.

The property was then leased out at Rs1.59 billion in collusion between the official and the company, the CIB said.

The disputed Durbarmarg deal 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 success of the People’s Movement in 2006 which eventually led to the abolition of monarchy in the country. Nepal Trust was formed in November 2007 to manage such properties in the national interest which now runs under the Nepal Trust Act, 2008.