Exposure of BFIs in Oriental scam at Rs 2.53 billion

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Kathmandu, June 27

Banks and financial institutions (BFIs) have submitted claims of Rs 2.53 billion that they had lent for the housing projects and airlines owned by realtor Sudheer Basnet, chief of Oriental Cooperative, at the Problematic Cooperatives Wealth Management Committee.

The committee, led by Chairman of Special Court Gauri Bahadur Karki, had sought claims from the victims of Oriental Cooperative, victims of housing projects and other businesses owned by Basnet in between April 16 and May 20.

A total of 16 financial institutions, including government-owned Rastriya Banijya Bank and Employees Provident Fund, have submitted their claims to the high-powered committee for recovery of loans and penalty. Among them, Rastriya Banijya Bank, Employees Provident Fund (EPF), Prabhu Bank and Nabil Bank have major exposure, according to Rewati Raman Pokharel, member secretary of the committee.

The committee will settle the claims on a case-by-case basis prioritising depositors; outstanding dues to the government, banks; those that had made advance payments for apartments and those who provided loans for the housing projects; and owners who had rented their property to Oriental’s offices. The victims will be gradually rebated after liquidation of Oriental’s property. The committee has been seeking help of the Central Investigation Bureau (CIB) of Nepal Police to identify the physical and hidden properties of Basnet and the board of directors of Oriental Cooperative.

It is reported that the housing and apartment projects of Oriental Builders and Developers, including Vegas City, Bagmati Apartment, Kohinoor Hill Housing, Aayusha Builders, which were initiated by Chairman of Oriental Cooperative and realty trader Basnet, misused an eye-popping Rs 4.20 billion in deposits of the cooperative and Rs 1.36 billion parked by customers for housing projects, apart from the loans obtained from BFIs to build the housing projects.

Some of the banks have written-down the loan issued to Basnet’s projects as it has remained as non-performing loan for a long time. NIC Asia Bank has already recovered its loan through auction of the housing project of Oriental located at Dhapasi, Kathmandu.

Likewise, Bank of Kathmandu has collateral of Basnet’s home in Shankhamul and Bagmati Apartment. Prabhu Bank has listed
Rs 332.4 million as non-performing loan, which was floated to Basnet-owned Agni Air.

“The committee will calculate the liability by verifying the submitted claims while settling the cases. For verifying the claims, the documents sought by the committee along with the claims are a must,” said Pokharel.

A total of 7,500 people from Biratnagar, Birgunj, Kathmandu Valley, Pokhara, Nepalgunj, Surkhet and Dhangadhi, who claim to have fallen victim to Basnet’s schemes, had submitted their application at the committee within the given deadline. The committee has informed that the submitted claims are being verified. The proof of savings amount in the cooperative; share certificates; proof of loan issued to the construction company and other projects; details of fixed property as collateral and citizenship certificate will be properly verified before settling the claims.

Basnet was released from jail in the first week of June after serving his two-year sentence. However, the committee has already seized his travel documents, bank accounts and summoned him numerous times to record his testimony during his imprisonment. As per Pokharel, Basnet and his allies could be summoned any time if the committee feels the need for further investigation.

                             Major claimants
Financial institution Sector Amount to be recovered
Rastriya Banijya Bank Housing Rs 549.2 million
Nabil Bank Housing Rs 295 million
EPF Housing Rs 535 million
Citizens Bank Housing Rs 135 million
Prabhu Bank Agni Air Rs 332.4 million
Prabhu Bank Housing Rs 150 million

Source: Problematic Cooperatives Wealth Management Committee

Written by Sandeep
This news first appeared on https://thehimalayantimes.com/business/exposure-of-bfis-in-oriental-scam-at-rs-2-53-billion/ under the title “Exposure of BFIs in Oriental scam at Rs 2.53 billion”. Bolchha Nepal is not responsible or affiliated towards the opinion expressed in this news article.