Ward committee secretary of the Rastriya Swatantra Party (RSP) in ward 10 of Bharatpur Metropolitan City, Chitwan, has quit the party over the alleged involvement of the party’s chairman, Rabi Lamichhane, in cooperative fraud.

RSP activist Shalikram Duwadi, who is also a victim of a cooperative fraud, announced on Sunday that he stepped down from his party post and ordinary membership of the party. He submitted resignation letters to the central chairman and district chairman of the RSP officially disassociating himself from the party.

Duwadi is the coordinator of the struggle committee formed by the victims of the Chitwan-based Sahara Multipurpose Cooperative Limited.

“We never admitted that Lamichhane was involved in cooperative fraud despite media reports,” said Duwadi in his resignation note. “We simply said that Rs120 million, which was deposited by victims in Sahara Multipurpose Cooperative, was misappropriated by Gorkha Media.”

According to Duwadi, the party questioned him about media reports that he shared on social media after the parliamentary committee made its report public last week. “I decided to stand with hundreds of cooperative victims,” Duwadi said. “I could not bear to see the tears in their eyes. I also lost Rs1.3 million in Sahara Multipurpose Cooperative. So I quit the party.”

Duwadi had been active in the RSP for the past two years. “I tendered my resignation to various party committees, but they have not responded yet,” he said.

A parliamentary special probe committee was formed to investigate crisis-ridden cooperatives. Last Monday, the committee submitted its report to the Speaker of the House of Representatives which was subsequently forwarded to the government.

The report concludes that Lamichhane was involved in misusing millions of rupees funneled into Gorkha Media Network from various cooperatives when he was the managing director of the now defunct network. The report also holds several others responsible for their roles in cooperative fraud.

The committee’s report calls for action against former deputy prime minister and home minister Lamichhane, and several others.

The report has said over Rs63 billion was embezzled by cooperative owners from various crisis-ridden cooperatives. It has recommended prosecuting four individuals, including Lamichhane, the then managing director of Gorkha Media Network; chairman Gitendra Babu (GB) Rai; a board member Kumar Ramtel; and initial founder Chhabi Lal Joshi. Joshi, a former deputy inspector general of Nepal Police, was arrested in Kathmandu on Sunday. However, Lamichhane and the leaders of the Rastriya Swatantra Party deny any wrongdoing.

The special probe committee was formed on May 28. The seven-member committee was formed as per the demand of the then main opposition Nepali Congress that had been demanding such a committee to probe cooperative fraud and had even been obstructing parliamentary proceedings demanding the same.

Sahara Cooperative in Chitwan is one of the crisis-ridden cooperatives. It is found that Rs120 million of Sahara Cooperative was channeled to Gorkha Media. Rai is the founder of Chitwan-based Sahara Cooperative.

Millions of rupees deposited in Sahara Cooperative have been embezzled, depriving the depositors from withdrawing their savings. According to Duwadi, around Rs850 million amounts of 10,000 depositors have been misappropriated by Sahara Cooperative.

The depositors of the Chitwan-based cooperative have been up in arms demanding the government take legal action against the guilty and return their deposits.