Court Orders Release of Six Accused in Cooperative Fraud Case on Bail of NPR 82.4 Million Including Journalist Girir

May 10, Pokhara – The District Court of Kaski has ordered the release on bail of six individuals facing supplementary charges in the fraud case involving Mitramilan Saving and Credit Cooperative Limited in Pokhara.

Judge Shyam Prasad Shrestha’s bench on Tuesday ordered the defendants’ release upon payment of cash or bank guarantee equivalent to the claimed damages.

The total claimed damages from the six accused amount to NPR 82,462,203, according to Ram Bahadur Kisan, spokesperson of Kaski District Court. The court mandated the release of the accused upon payment of this amount as bail.

Specifically, Bharat Bhattarai is required to pay NPR 35,163,204 as compensation for embezzlement related to cooperative funds.

Journalist Arjun Giri has been assigned a bail amount of NPR 31,860,252. Mitramilan Cooperative’s Vice President, Vijay Lamsal, must post NPR 6,311,233 to secure release.

Further, Raju Baral, a shareholder and member of the cooperative’s managing committee, has a bail amount of NPR 3,680,239. Santosh Ghimire, an employee of the National Cooperative Bank, is assigned NPR 3,101,275, and shareholder Buddhi Sagar Paudel NPR 2,400,000 as compensatory bail.

The court order states that the accused have acknowledged their responsibility to return the depositors’ funds and have expressed readiness to refund the amount from their movable, immovable, and ancestral assets.

The fraud case against the cooperative was originally filed in 2023 BS (circa 1966 AD). The cooperative’s chairperson, Raman Paudel, and manager, Kiran Adhikari, are currently in pre-trial detention.

The court had directed a separate investigation to assess damages and file supplementary charges. According to Kamala Kafle, chief public prosecutor of Kaski, experts were tasked with quantifying the damages attributed to each defendant. Debtors were added as additional defendants as part of the expanded charges, and statements were re-recorded.

Kafle added that some accused have submitted additional repayments during the ongoing investigation.

The Government of Nepal initiated the cooperative fraud case following complaints from depositors that funds were being embezzled at Mitramilan Cooperative. All accused were arrested by December 2023 and remain in pre-trial detention as proceedings continue.

In a related previous development, former Cooperative Registrar of Gandaki Province, Uday Bahadur Parajuli, was released on bail of NPR 2 million in Chaitra 2080 (March 2024), following a high court order in Pokhara.

The court order notes that the accused have been detained for a considerable time, but the final hearing and evidence presentation are still pending.

Although the defendants admit their involvement in cooperative business transactions, shareholding, and management committee roles, they deny charges of cooperative fraud, according to the order.

The accused have pledged to bear the liability to refund depositors’ money from their personal assets if necessary, the order further states.

The court concluded that there is no immediate risk of defendants fleeing, destroying evidence, or obstructing the investigation. It also considered recent amendments to the Cooperative Act facilitating settlements in some fraud cases and the increasing likelihood of refunding complainants.

The issue surfaced after depositors complained they were unable to withdraw their savings and that the cooperative’s financial condition was weakening. Subsequent investigations uncovered alleged embezzlement and irregularities in financial accounts involving management and board members.

Initial charges were filed against 33 individuals, including directors, officials, employees, and debtors, after 714 depositors lodged complaints claiming they were unable to recover NPR 317.8 million. Later, supplementary charges against an additional six individuals were filed, claiming damages of NPR 82,462,203.

The investigation report highlighted that the cooperative’s savings were unsecured, depositors’ funds were at risk, and irregularities were detected in financial transactions. Based on the claim of embezzlement from the complainants, prosecution against the accused proceeded.

During the hearing of supplementary charges, the court found clear individual liabilities of the accused and their commitment to pay compensation. However, noting that the case’s final resolution will require more time, the court deemed continued detention unnecessary.

The court ordered that defendants who fail to provide cash or bank guarantees equal to the claimed damages must remain in custody at Kaski prison.

Supplementary charges also implicated debtors, with 60 individuals named as additional defendants in the Mitramilan Cooperative case.

The case originally involved depositors claiming they were unable to recover NPR 317.8 million from the cooperative. Initial legal action targeted 33 persons, and after supplementary investigation, six more were charged with a compensation claim exceeding NPR 82 million.