Lumbini Province
Another cooperative scandal rocks Butwal
Over Rs220 million in deposits allegedly misappropriated from Dingarnagar Duragami Multipurpose Cooperative.
Ghanashyam Gautam
Another major cooperative scandal has rocked Butwal as more than Rs220 million of depositors’ money was reportedly embezzled from Dingarnagar Duragami Multipurpose Cooperative. With its chairperson, secretary and manager absconding, around 1,900 depositors have been left in deep trouble.
This is the 12th such cooperative scam over the past few years in Rupandehi district, where cooperative operators have disappeared after misusing public deposits.
Located in Janakinagar of Tilottama Municipality-3, Dingarnagar Duragami Multipurpose Cooperative had been operating profitably in the dairy sector for years, distributing annual bonuses ranging from Rs1,000 to Rs24,000 to its members. However, the recent audit—carried out after growing suspicion—has revealed that these incentives were merely a façade to distract depositors while senior officials siphoned off massive amounts of funds.
Following the expose, the cooperative’s Chairperson Ghanashyam Tiwari, Secretary Ram Bahadur Thapa and Manager Basanta Parajuli all absconded. A preliminary audit by the Provincial Cooperative Registrar’s Office in Dang indicates embezzlement exceeding Rs220 million from the cooperative. Of that, over Rs90 million is believed to have been misappropriated by Parajuli alone. The remaining amount of embezzlement is attributed to Tiwari and Thapa.
According to the cooperative’s treasurer Surendra Bajracharya, the scandal came to light after he found inconsistencies in transactions related to two cheques he had signed. “One cheque went to the intended recipient, but when I inquired about the other, I found that the person named hadn't received or even requested the funds. That raised alarm bells for me,” Bajracharya told the Post.
Upon demanding clarification, Bajracharya was told by Chairperson Tiwari that the matter was trivial and would be sorted by the manager. However, Tiwari and Secretary Thapa reportedly refused to suspend Parajuli or initiate a formal investigation.
Eventually, a board-level meeting was held where the embezzlement was acknowledged. Manager Parajuli was made to sign an agreement accepting responsibility for Rs95.5 million. But before any restitution could begin, all three top officials absconded, further infuriating the depositors.
Meena Neupane, a victim, said attempts were made to silence concerned depositors through intimidation. “I confronted the chair and secretary when I first heard about the financial misconduct,” she said. “They told me not to believe rumours and even said they’d repay losses from their own assets if necessary. Then, within days, they tore up meeting records and fled.”

Efforts were made to resolve the issue internally. A compromise plan was floated in which member Kamal Paudel offered to inject Rs100 million in liquidity, provided Tiwari or Thapa pledged collateral. An agreement was signed on June 30 to begin returning funds from July 3. But the very next day, Tiwari reportedly told associates, “I’d rather go to jail than return public money.” On July 1, Thapa was caught on CCTV tearing up minutes of board meetings held earlier and all three key figures vanished.
Further investigations suggest that Tiwari had purchased a hotel near Yogikuti in Tilottama for around Rs20 million using cooperative funds. He is also accused of investing in real estate and a limestone quarry in Palpa. Thapa, meanwhile, allegedly misappropriated over Rs30 million and is believed to have engaged in unauthorised cash transactions amounting to Rs140 million.
Members are now intensifying pressure. On Friday, they surrounded the homes of the accused and staged sit-ins at the cooperative office. “Instead of helping us, the police are shielding the guilty,” said Neupane. “A large deployment of officers at their homes is hindering proper investigation.”
Duragami Cooperative, established in 1993 and merged with Dingarnagar Cooperative in 2010 under the name Dingarnagar Duragami Multipurpose Cooperative, had long been under the control of the absconding trio. Tiwari, a regional representative of the Nepali Congress, had even aspired to run for ward chair in the last local election. Thapa is the former secretary of the Congress’ Tilottama Municipal Committee.
Many depositors attempted to lodge formal complaints, but local police allegedly refused to register their grievances. Deputy Superintendent of Police Indra Rana of the Area Police Office in Butwal, however, said they are awaiting the cooperative registrar's investigation. “We’ve received some fraud-related complaints and are investigating those,” he said. “Police action will commence based on the registrar's final report.”
According to Nepal Rastra Bank guidelines under the Cooperatives Act, uncollateralised loans must not exceed five times the member's savings or Rs500,000—whichever is lower. Loans must also be guaranteed by at least two members. These norms appear to have been blatantly violated in Dingarnagar Duragami Multipurpose Cooperative.
There are about 900 borrowers among the cooperative’s 1,900 members. Over 400 depositors are now demanding accountability and urging swift legal action. For now, the provincial registrar’s team, working under police supervision, has sealed the office and resumed auditing.