Rastriya Swatantra Party came to power promising good governance, transparency and clean politics. Following reports of Home Minister Sudan Gurung’s investments that put him alongside businessman Deepak Bhatta, who is under investigation for money laundering, leaders within the ruling party are demanding a fair investigation.

Two weeks ago, the RSP recalled Labour Minister Deepak Kumar Sah following controversy over the appointment of his wife to the Health Insurance Board. Party insiders say it cannot remain silent now that more serious allegations have surfaced against Gurung.

“Sah was sacked without allowing him to clarify. Allegations against the home minister are more serious,” an RSP lawmaker, who is also a party office-bearer, told Kantipur. “No wrongdoing should be covered up. It should be investigated through a proper mechanism.”

The issue, however, was not discussed at Monday’s Central Committee meeting, with leaders saying it was not on the agenda. Party spokesperson Manish Jha said the leadership’s attention had been drawn to the matter and that consultations were underway.

Seven party officials, central committee members and lawmakers approached by Kantipur shared a similar view: an investigation had become necessary once questions were raised about the minister. Some, however, said his ownership of shares alone should not automatically be treated as a business partnership with Bhatta, though Gurung should clarify the source of his investments. Another central committee member, also a lawmaker, said he was waiting for internal party discussions.

“A government founded on the movement for good governance and transparency should have all its members beyond reproach. If this continues, it will be difficult to run both the government and the party,” he said. He added that a sensitive ministry like Home Affairs should be led by a qualified person, not someone learning on the job.

On Sunday evening, media outlets such as diyopost.com and janaastha.com reported that Gurung held investments in Star Micro Insurance Company Limited and Liberty Micro Life Insurance, both of which are also held by Bhattaaaaa and the Shankar Group. A photograph also surfaced showing Bhatta being honoured as a donor in 2021 by Hami Nepal, an organisation chaired by Gurung.

Bhatta was arrested on April 1 and is being investigated by the Department of Money Laundering Investigation after being detained by the Nepal Police’s Central Investigation Bureau.

The shares, reportedly purchased after the Gen Z movement, were not listed in Gurung’s public asset declaration submitted on April 12. In the statement published by the Office of the Prime Minister and Council of Ministers, Gurung declared assets including Rs3 million worth of 30,000 shares in Hope Holdings Pvt Ltd, Rs 5.7 million worth of 57,000 shares in Lagum Premium Apartments Pvt Ltd, and Rs7 million in Adventure Villa Pvt Ltd. He also listed shares worth Rs 27.4562 million in various companies.

On Monday, Gurung issued a clarification through social media, claiming he had already disclosed more than Rs20 million in stock market-related investments in his asset declaration. “The investments in Star Micro Insurance and Liberty Micro were included within that group. This is not concealment, but a matter of classification,” he said.

However, Star and Liberty Micro Insurance companies have not yet gone public through IPOs, and their shares are not traded on the stock market. Former chair of Transparency International Nepal, Khemraj Regmi, said the government must satisfy the public once questions are raised. “Whether the option is resignation or something else, both the party and government must speak,” he said. Since the current government came to power on the promise of good governance and the Gen Z movement, he said Gurung stepping aside voluntarily would be appropriate.

Gurung emerged as one of the faces of the Gen Z movement held on September 9 and later entered politics. In the February 21 election, the RSP won nearly a two-thirds majority. Many were surprised when Gurung’s name emerged for Home Minister in the cabinet led by senior leader Balendra Shah.

Party insiders say RSP chair Rabi Lamichhane had wanted Deputy Chair DP Aryal to lead the ministry, while Prime Minister Shah had initially proposed Sunil Lamsal. Gurung eventually emerged as a compromise choice.

His tenure has nevertheless been marked by controversy. Party lawmakers have complained that he failed to coordinate with elected representatives during inspections and interfered in matters handled by other ministries. Soon after taking office on March 26, Gurung reportedly directed the police chief, Dan Bahadur Karki, to arrest former Prime Minister KP Sharma Oli and former Home Minister Ramesh Lekhak.

Senior police officials insisted that legal procedures and the findings of a commission report should be reviewed first. The two were eventually arrested after written authorisation was provided, but were released 15 days later on a Supreme Court order.

Since then, Gurung has regularly publicised arrest figures and police actions through social media, drawing criticism from former security officials who say operational autonomy should be left to the police.

“The home minister should do the ministry’s work and let police headquarters do police work,” said former Deputy Inspector General of Police Hemanta Malla Thakuri.

A serving senior police officer, speaking anonymously, said courts were releasing many detainees because due process had not been followed.

Last week, Gurung told journalists he had begun studying law.

“I thought the minister was the most powerful position and everything could be fixed from here,” he said. “But now I feel judges are the most powerful.”

The Prime Minister’s Secretariat has not publicly responded to the latest controversy. When Kantipur reached out to Kuman Ben, advisor to the prime minister, with a series of questions about allegations against Gurung, it did not receive a response.

Security analyst Indra Adhikari said Gurung should step aside from the ministry during any investigation, noting that his continued presence in the office could influence the process.

On Monday, Gurung took to Facebook to say he was ready to cooperate with any investigation and would abide by whatever decision the party makes.

“Allegations and truth are not the same. Decisions must be based on evidence, not emotions,” Gurung said, adding that the probe into Bhatta was being conducted by the Department of Money Laundering Investigation under the Finance Ministry, not by agencies under the Home Ministry.

“If I had interfered, such an investigation process would never have moved forward,” he said.

Late on Tuesday night, Gurung took to Facebook to hit back at his critics, saying those who had spent years with their eyes fixed on state money are now scared. The media trial and the orchestrated noise, he said, is nothing but their desperation. “The action won’t stop, I won’t be rattled,” he wrote. “I haven't seen them work this hard even when someone was embezzling Rs 500 million a day.”