Kathmandu: Rajendra Shakya, chairman of the Guna Group and operator of Guna Airlines, has been arrested on charges of banking fraud. Nepal Police’s Central Investigation Bureau (CIB) took him into custody on Wednesday from Bhainsepati in Lalitpur.
Police allege that Shakya misused a loan taken from Prabhu Bank in the name of Guna Airlines by diverting funds to settle a long-pending debt owed by Prabhu Management Pvt Ltd to the bank itself. Investigators say Shakya channelled at least Rs 150 million of the airline’s loan to Prabhu Management, which then used the money to clear its own obligations to Prabhu Bank. The CIB has obtained court permission to detain him for two days for questioning.
The case centres on a complex web of financial irregularities involving Prabhu Bank and Prabhu Management, a company previously owned by former Prabhu Bank chairman Devi Prakash Bhattachan and others. Between 2015 and 2018, Prabhu Bank had appointed Prabhu Management as its super agent for remittance services. When the agreement ended in early 2018, Prabhu Management owed the bank Rs 660 million. Remarkably, the company only settled this amount more than three-and-a-half years later, in September 2021 without paying a single rupee in interest.
According to investigators, the interest on the overdue amount alone should have exceeded Rs 89.3 million. Allowing such a large sum to remain interest-free for years caused significant financial loss to Prabhu Bank, police say.
Sources within the investigation claim the settlement was made possible through fresh loans issued by Prabhu Bank to companies linked to Shakya, effectively using the bank’s own money to clear its old dues, a practice known as “layering” that masked the original default.
The scandal has already led to the arrest of Prabhu Bank’s former CEO Ashok Sherchan, along with deputy CEO Mani Ram Pokhrel and chief risk officer Risab Shrestha. A confidential report prepared by a special team from Nepal Rastra Bank reportedly exposed widespread loan misuse and collusion at the senior level. Following briefings to Governor Dr Bishwanath Paudel and coordination between the central bank and CIB, the top executives were taken into custody.
CIB spokesperson SP Shiva Kumar Shrestha clarified that Shakya’s arrest is not related to regular business loans his companies received from Prabhu Bank, but specifically to the diversion of funds used to artificially settle Prabhu Management’s debt.
Police say evidence suggests that whenever Nepal Rastra Bank’s supervision teams visited, documents were allegedly manipulated to show the Rs 660 million debt as already settled. The probe has now expanded to other investments made through Prabhu Management, and arrest warrants have reportedly been issued for several more senior bank officials who are currently at large.
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