Kathmandu. The Smart Telecom property embezzlement case, which is considered to be one of the biggest financial irregularities in Nepal’s telecommunications sector, has now reached a decisive legal juncture. The Central Investigation Bureau (CIB) of Nepal Police has submitted its report to the District Government Attorney Office, Kathmandu and has recommended action against 22 people, including former officials of Ncell, Nepal Investment Mega Bank (NIMB), the then Smart Telecom and the Nepal Telecommunications Authority (NTA). The report also states that around Rs 96 billion should be recovered from them.
The case started after Smart Telecom failed to pay about Rs 30 billion in renewal fees, royalty and other liabilities to the government. After this, the Nepal Telecommunication Authority automatically revoked the license of Smart Telecom on 3 April 2080. According to the Telecommunication Service Provider Asset Management Regulations, 2079, after the license of a telecommunication company is revoked, the state has the right over all the assets of that company, including towers, fiber network, switching system, equipment, and infrastructure related to spectrum. That is, these assets cannot be bought or auctioned by any bank, private company or third party.
But the findings of the research are different. Nepal Investment Mega Bank (NIBL) has been accused of auctioning Ncell for Rs 4.6 billion by treating the property as collateral. According to the CIB’s conclusion, the transaction was not a normal banking process but an illegal transfer of government property, in which some officials of the concerned authorities are suspected to be in collusion.
The then chairman of Nepal Telecommunication Authority, office-bearers of Smart Telecom, officials of NIMB Bank and senior management of Ncell are also under the purview of the investigation. Earlier, the then chairman of Nepal Telecommunication Authority Bhupendra Bhandari had been arrested. The then CEO of NIMB Bank has been arrested and released after the legal process, while arrest warrants have been issued against some directors of the bank and senior officials of Ncell. During the course of the investigation, the bank accounts of the concerned persons were frozen, documents were seized and detailed analysis of financial transactions was carried out.
According to the CIB, the report has been prepared by studying the legal provisions related to the protection of government property, banking transactions, mortgage management, telecommunication laws and related decision-making process. Based on the report, the District Government Attorney’s Office will prepare a charge sheet and register it at the Kathmandu District Court. After that, the court will hear the case on the basis of evidence, documents and statements.
If the court finds the allegations substantiated, the defendants could face fines of around Rs 96 billion, confiscation of assets and imprisonment under applicable law. Therefore, this case is not just a dispute related to a company or a bank, but is seen as a case of high importance directly related to government property, the role of regulatory bodies, the banking system and the good governance of Nepal’s telecommunications sector.
This case also raises another serious question: How did the property that was already owned by the government under the law reach the private companies? If the court proves that there was any illegal collusion in the decision-making process between the regulator, banks and private companies, then it could become one of the biggest government asset embezzlement cases in Nepal’s economic history, according to legal experts.
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