Supreme Court tells authorities to determine the source of Sumargi’s money, which is currently frozenOrders the authorities concerned to find whether the funds entered the country violating Money Laundering Prevention Act
The Supreme Court on Tuesday scrapped the application of Muktishree Cement Industry, promoted by controversial businessman Ajeya Sumargi, demanding an order to release its funds frozen by the Nepal Rastra Bank, which was received from abroad.
A division bench of Chief Justice Cholendra Shumsher Rana and Judge Bam Kumar Shrestha said the company’s petition has been quashed since the amount has been frozen as per law and there was no condition for releasing it.
The court has told the agency concerned to determine the source of funds received by Muktishree as well as to find whether it entered the country violating the Money Laundering Prevention Act. The judges have also asked to determine whether the applicant company is liable to action from the authorities concerned.
The court has told the central bank to determine the legality of Sumargi’s funds within six months as its letter to the court failed to establish that the fund deposited at Nepal Investment Bank, where the money remains frozen, in the name of Muktishree Cement was transferred from Sumargi’s own account abroad.
The bench has also told the central bank to submit the progress report to the Verdict Implementation Directorate of the court until the legality of the funds is confirmed.
With the latest order, the SC continued is earlier order issued on January 8 quashing the interim order of the same court allowing Muktishree to withdraw the money continues.
On December 25 last year, a single bench of then justice Deepak Raj Joshi had issued an interim order paving the way for the cement company to withdraw $6.99 million which is frozen by the central bank saying its promoter Sumarghi he had failed to show the source of funds.
After the court order, Muktishree had withdrawn almost all the money from Nepal Investment Bank and transferred the funds to three banks and financial institution—Prime Bank, Nepal Bangladesh Bank and Mahalaxmi Development Bank.
But on January 8, a division bench of Chief Justice Rana and Judge Ananda Mohan Bhattarai quashed December 25 interim order to keep the money in whatever condition it was before December 8. The central bank then ordered the three banks to return the money to Nepal Investment Bank.
But, the banks did not return the money stating that it was transferred to them either in the form of loan repayment or was withdrawn by Sumargi to pay remuneration to his employees. On the other hand, the central bank was also finding it hard to implement the court order as the bench didn’t say how to retrieve the money that had already been withdrawn.