The Department of Money Laundering Investigation (DMLI) has raided the houses of Sulav Agrawal and Deepak Bhatta, as well as the office of Himalaya Re-Insurance, in connection with a money laundering probe. Agrawal is the chairman of Jagdamba Holdings under the Shanker Group, while Bhatta heads Infinity Holdings.

Both individuals are alleged to have been involved in suspicious activities that include manipulating major public procurement contracts, securing licenses for hydropower and banking/insurance companies, and influencing tax rates included in the annual budget—often in collusion with political leaders, public officials, and employees in positions of power.

Bhatta was arrested on April 2, and Sulav on April 4. The investigation initially led to the arrest of Shanker Agrawal, father of Sulav, who was released later.

Both Sulav and Bhatta are currently in police custody for a money laundering investigation. The arrest of Sulav followed a broader investigation triggered by the arrest of businessman Bhatta, whose financial and political links with the Shanker Group are linked to the case.

Authorities said the probe could have far-reaching implications, with more than 40 companies under the group potentially affected. The conglomerate, which reports annual turnover exceeding Rs125 billion, employs over 15,000 people and has significant exposure to the banking sector, with loans estimated at around Rs200 billion.

Founded in 1935, the Shanker Group grew from a textile trading business in Kathmandu into a major industrial house spanning steel, cement, insurance, hydropower and trading sectors. Its flagship, Jagdamba Steels, remains a dominant player in Nepal’s rebar market, accounting for a significant share of national production.

Investigators are also examining the group’s financial ties with Bhatta, including transactions flagged by Nepal Rastra Bank’s Financial Intelligence Unit between 2020 and 2022. Some of these transactions reportedly flowed into investments in Himalayan Reinsurance, a company jointly backed by the group and Bhatta.

The DMLI had first initiated scrutiny into Bhatta in November 2022 following reports of suspicious financial transactions. The investigation, however, had slowed under the previous administration before gaining renewed momentum after recent political shifts.

At the centre of the probe is a report by Nepal Rastra Bank’s Financial Information Unit, which flagged a Rs450 million transfer in June 2021 to Bhatta’s personal account at Siddhartha Bank from Jagdamba Steel. The transaction was not reflected in the company’s audit report.

Investigators have also identified irregularities in overdraft accounts linked to Bhatta and Infinity Holdings, including unusually high-volume transactions that exceeded standard banking limits. Officials say preliminary findings indicate possible “layering” and “integration” of illicit funds, prompting a detailed investigation.

The probe also examines Bhatta’s alleged role in influencing high-value public procurement deals, including supplies for security forces and involvement in the Budhi Gandaki Hydropower Project awarded without competitive bidding.

Authorities are further looking into alleged links with senior political figures and regulatory bodies, as the investigation expands into possible connections with other individuals.