News Summary
- The Communist Party of Nepal (UML) has returned over NPR 38.5 million to the state treasury, which was spent on foreign medical treatment for former top leaders including a former president, former prime minister, and leader Jhalnath Khanal.
- The Commission for the Investigation of Abuse of Authority (CIAA) is investigating the illegal expenditure on VIP medical treatments and may soon decide not to file charges in this matter.
- On April 27, 2026, the Supreme Court invalidated the directive authorizing government payment for foreigners’ VIP treatment expenses abroad.
May 21, Kathmandu – Following an investigation initiated by the Commission for the Investigation of Abuse of Authority (CIAA), the Communist Party of Nepal (UML) has reimbursed the state treasury for medical expenses paid for former VIPs.
According to sources from Nepal Rastra Bank, on May 15, 2026, UML returned funds equivalent to the government payments previously made for medical treatments of three former top officials.
Approximately NPR 39 million has been deposited at the Nepal Rastra Bank for medical treatments attributed to former President Dr. Ram Baran Yadav, former Prime Minister KP Sharma Oli, and Jhalnath Khanal.
Complaints were filed alleging that these expenditures breached existing laws by improperly using state funds for overseas medical treatment of VIPs, prompting CIAA to launch an investigation.
“There was immense pressure on us and senior officials, including myself, to complete the investigation quickly and file charges regarding the illegal payments,” a senior CIAA official stated. “To avoid complications, the party appears to have reimbursed the amount spent back into the state treasury.”
The UML returned NPR 6,525,000 for Dr. Yadav, NPR 23,935,714 for KP Sharma Oli, and NPR 8,139,155 for Jhalnath Khanal.
Sources indicate that most of the funds were withdrawn from the UML party account, totaling NPR 38,599,869. It remains undisclosed exactly from which accounts and sources these payments were made to Nepal Rastra Bank following a confidential decision taken by the party.
Some amount related to Dr. Yadav’s payments is still pending.
After the reimbursement, several UML central office leaders have submitted proof of deposit of these funds to the Ministry of Foreign Affairs, the Office of the Auditor General’s Treasury and Accounts Control Office, and the Commission for the Investigation of Abuse of Authority.
Sources connected to CIAA suggest that a decision may soon be made to not pursue a formal case. UML central office secretary Bhisma Adhikari stated he was unaware of the reimbursement details.
When asked if payments were made via checks signed by him and others, he replied, “I will need to inquire further before commenting more on the matter.”
Senior advocate Dhruvala Shrestha and others had filed complaints accusing VIPs of misappropriating state funds. The complaints also reached the Prime Minister’s Office and the Council of Ministers.
In recent weeks, due to pressure to investigate the complaints, CIAA Chief Commissioner Prem Kumar Rai and officials reportedly engaged in discussions with senior leaders of the main opposition party.
“It was clear that if the party did not return the funds, a corruption case would be unavoidable,” said a source linked with CIAA. “Subsequently, UML returned over NPR 35 million.”
A UML leader revealed that the Deuba-led government also played a role in paying VIP treatment expenses. Hence, payments covering both Oli and Deuba’s responsibilities were settled simultaneously.
Funds linked to former Prime Minister Jhalnath Khanal have also been returned within this context.
Illegal Payments
According to the Public Health Act, 2018 effective from September 18, 2018, the government is not authorized to cover foreign medical expenses of Nepali citizens.
Section 30 of the act states, “Notwithstanding any prevailing law, expenses incurred on foreign medical treatment will not be borne by the Government of Nepal.”
However, several governments have previously covered foreign medical costs for VIPs under the Citizen Relief or Financial Assistance Procedure of 2016.
This procedure includes former distinguished persons such as the President, Vice President, Prime Minister, Speaker, Chief Justice, Deputy Speaker, Deputy Prime Minister, Ministers, State Ministers, Assistant Ministers, Members of Parliament, and constitutional officeholders.
Several cabinet meetings authorized payments for VIP medical treatment.
On August 6, 2016, the cabinet approved NPR 1 million for former President Dr. Yadav’s treatment.
Two weeks later, funds were also disbursed from the treasury for medical treatment during his stay in the United States, and NPR 200,000 was released for treatment in Chandigarh, India, in December.
Between 2019 and 2024, funds totaling over NPR 6,525,000 were disbursed multiple times for Dr. Yadav’s medical expenses.
Former Prime Minister KP Sharma Oli’s treatment in Singapore reportedly cost about NPR 12.3 million, approved by the cabinet on August 17, 2019. Subsequently, additional payments totaling NPR 11.6 million were authorized.
Former Prime Minister Jhalnath Khanal’s medical expenses amounted to NPR 8.1 million, based on a cabinet decision made on June 21, 2021.
The government also paid NPR 5 million for former Foreign Minister Sujata Koirala’s treatment, though that amount has not been reimbursed.
UML has stated that payments made for leaders of other parties, except its chairman Oli, have also been returned.
Directive Overruled
The Supreme Court invalidated the cabinet directive that allowed government payment of foreign medical expenses for VIPs, after a writ petition contested misuse of state budget on these medical treatments.
The UML government had passed legal provisions through the Public Health Act to prevent such payments.
Nonetheless, payments were still made under the 2016 cabinet directive until the Supreme Court’s constitutional bench revoked it on April 27, 2026.
Advocate Radhika Chamlagai had petitioned for the directive’s cancellation, arguing it conflicted with constitutional law.
Two weeks ago, another petition named former President Dr. Yadav, former Prime Minister Oli, Jhalnath Khanal, and former Foreign Minister Sujata Koirala, requesting recovery of the payments.
According to CIAA sources, the treatment expenses incurred by President Ram Chandra Paudel in India remain under dispute.
Paudel has declared an intent to personally repay roughly NPR 6 million in medical costs. Additionally, CIAA is investigating complaints related to overseas medical expenses for former Deputy Prime Minister Narayan Kaji Shrestha in Japan and former Minister Barsaman Pun in China.
Senior advocate Shrestha, representing the complainants, emphasized that despite filed complaints, no action has been taken yet. He expressed frustration over the Prime Minister’s inability to address these issues.
