A five-hour police raid of the residence and office of prominent Biratnagar industrialist Prakash Mundada on Monday ended without any seizure, drawing sharp criticism from the business community and raising questions about the credibility of the intelligence that prompted the operation.

A large number of police officers entered Mundada’s residence in ward 7 of Biratnagar Metropolitan City, acting on what officials described as ‘special intelligence’. Superintendent of Police Kabit Katawal, chief of the District Police Office in Morang, personally led the operation, accompanied by officers from the district police office, ward police units and the Area Police Office in Rani.

Several senior officers, including Deputy Superintendents of Police Makendra Kumar Mishra, Santosh Shrestha and Lokendra Singh Guru, as well as Police Inspector Prabin Ghimire, took part in the search. More than a dozen police vehicles were deployed around Mundada’s residence, while security personnel temporarily restricted movement in the surrounding area, including roads leading towards the District Administration Office and Golchha Chowk.

Despite an extensive search of the residence and the office that lasted around five-and-a-half hours, police failed to recover any illegal cash, gold, documents or other suspicious materials.

The operation has triggered concerns among industrialists and traders, who argue that such raids, carried out without producing any evidence, risk damaging the reputation of legitimate businesses and undermining confidence in law enforcement.

Pawan Sharada, Koshi Province chair of the Confederation of Nepalese Industries, condemned the operation, saying it had further weakened the morale of the private sector at a time when businesses were already facing economic difficulties.

“The state itself has terrorised industrialists and businesspeople,” said Sharada. “Treating entrepreneurs as though they were terrorists is not only serious but also condemnable.”

SP Katwal, however, defended the operation, saying police had acted solely on information received through official channels. “We received specific intelligence and carried out our duty accordingly. After thoroughly searching the house and office, nothing was found,” said Katawal.

He added that the information had been submitted through official sources with specific names and details, requiring police to investigate. Similar searches are routinely conducted in other criminal investigations, he said.

Industrialist Mundada, a former president of the Morang Chamber of Commerce and Industry and operator of the Debenara Group, declined to comment extensively. “The police must have done what they believed was their duty,” he said. “They searched our house but found nothing.”

Police have not disclosed the source of the intelligence or the nature of the investigation. Officers only said they had received information suggesting that a large quantity of illegal cash and gold might have been stored at the property. They have not stated whether Mundada is under investigation in connection with any criminal offence.

The raid has prompted wider concern among business leaders over police procedures and the potential impact on investor confidence.

Nand Kishore Rathi, president of Morang Industry Organisation, questioned the necessity of carrying out the search before dawn. “The state certainly has the authority to conduct searches when there is suspicion,” he said. “But arriving at four in the morning at the home of a respected business family has created unnecessary fear. The process could have been handled in a more measured way.”

Hemanta Malla Thakuri, former chief of Central Investigation Bureau of Nepal Police, also stressed that police raids should be based on concrete and verifiable intelligence.

“Police have the authority to conduct raids, but there are established procedures,” he said. “If information suggests illegal activities such as narcotics, there should be sufficient grounds to believe it is credible before launching such an operation. Acting merely on suspicion creates fear and can affect not only business confidence but the wider economy.”

Debenara Group is one of Biratnagar's oldest and most prominent business houses. Its principal promoter is Prakash Mundada, a former president of the Morang Chamber of Commerce and Industry. According to people familiar with the group’s history, the Mundada family has been engaged in trade and commerce from Biratnagar for more than a century.

The group has also invested in the aviation sector. It owns Sita Air and is reported to operate a fleet of around five helicopters. In addition, it has interests in the real estate sector, with property investments in Kathmandu, Pokhara and other major cities.

In manufacturing, the Debenara Group operates Himgiri Soap Industry in Biratnagar. It also owns the ‘Baba’ and ‘Maruti’ edible oil brands. The group has expanded into the education sector as well, running Delhi Public School and Star Engineering College in Biratnagar.

The Debenara Group is also regarded as one of Nepal’s leading producers and exporters of silver jewellery. According to industrialists in Biratnagar, it is among the country’s largest business houses engaged in manufacturing silver ornaments for export, with around one quintal of silver reportedly used each day in jewellery production.