Kathmandu: The arrest of prominent businessman Shekhar Golchha on Baisakh 10 sent shockwaves through Nepal’s private sector. A former president of the Federation of Nepalese Chambers of Commerce and Industry and widely regarded as one of the country’s most respected corporate figures, Golchha’s detention stunned the business community. It triggered a wider debate over how the state handles financial crime investigations.
Before Golchha’s arrest, Nepal Police’s Central Investigation Bureau (CIB) had already detained businessmen Shankarlal Agrawal, Deepak Bhatt and Sulav Agrawal in connection with the alleged misuse of billions of rupees belonging to Himalayan Reinsurance.
Golchha’s arrest, however, became a turning point. Many business leaders questioned whether the government, in its aggressive pursuit of financial wrongdoing, had crossed a line by treating cooperating entrepreneurs like hardened criminals and damaging reputations built over decades.
Business leaders pointed out that Golchha’s companies employ tens of thousands of people directly and indirectly, contribute billions in taxes and support countless families and public institutions through economic activity. To them, the decision to arrest and detain him over what they described as possible “errors or irregularities” rather than violent crime created fear across the private sector.
Major business organizations including the Federation of Nepalese Chambers of Commerce and Industry, Confederation of Nepalese Industries and Nepal Chamber of Commerce, publicly objected to the arrests, issuing statements criticizing the government’s approach.
While the business community felt ignored by the state, many believe the judiciary took their concerns seriously. Nepal’s Supreme Court later ruled that there had been serious procedural flaws in Golchha’s detention and ordered authorities to continue investigating him without keeping him in custody.
Police say the businessmen are under investigation for securities fraud, insurance-related offences, banking crimes, tax evasion and money laundering
The court observed that the district court had authorized detention without first seeking bail or guarantees from the accused. Following the order, Golchha was released on the condition that he cooperate with investigators whenever required. He has since returned to work, although fears within the business community remain strong.
Meanwhile, businessman Deepak Bhatt, who was arrested on Chaitra 19, remains in police custody. Initially held at a police facility in Sanepa, Lalitpur, he was later transferred to a detention centre in Boudha, Kathmandu. His wife, Ayushma Nepal, has requested permission for medical treatment, stating that Bhatt suffers from a long-standing chest condition that has worsened in custody, but authorities have yet to respond.
Similarly, Sulav Agrawal has remained in custody since Chaitra 22. Investigators consider him a central figure in the alleged misuse of funds from Himalayan Reinsurance. Unlike Golchha, who was briefly allowed hospital care, Sulav has reportedly not received similar treatment facilities.
Police say the businessmen are under investigation for securities fraud, insurance-related offences, banking crimes, tax evasion and money laundering.
The case has also sparked concern over what many see as “trial by media.” Social media platforms and some news outlets have already portrayed the detained businessmen as guilty, despite the absence of any court verdict. Critics argue that public narratives are increasingly replacing judicial processes, raising questions about fairness and the presumption of innocence.
Investigators are still searching for more than a dozen other individuals allegedly linked to the case. Among them are high-profile businessman Raj Bahadur Shah, who has repeatedly been recognized as one of Nepal’s highest taxpayers, as well as businessmen Amit Mor and Rohit Gupta, both directors of Himalayan Reinsurance. Sulav Agrawal’s brother, Sahil Agrawal, who chaired the company’s investment committee, has also not been arrested.
At the centre of the investigation is Bhrikuti Stock Broking, also known as Broker No. 55, a licensed stock brokerage firm accused of facilitating questionable transactions. Its CEO, Sandeep Chachan, is among those being investigated but has not been detained.
A CIB official told Klikmandu that many suspects have already fled abroad, making arrests difficult. According to the officer, those who remained in Nepal — including Golchha, Bhatt and Agrawal — were easier to apprehend because they cooperated with investigators and did not attempt to flee.
The official admitted that if the others had remained in Nepal, they too might have faced detention, while those who escaped abroad may eventually return after formal charges are filed and fight their cases without spending time in custody unless convicted.
The case has intensified criticism of what business leaders describe as “punitive detention” — using pre-trial detention as a form of punishment rather than purely for investigation. They argue that in financial crime cases, authorities should prioritize questioning, documentation and legal proceedings instead of custodial detention, particularly when suspects are cooperating and their passports have already been seized.
Former Confederation of Nepalese Industries president Rajesh Kumar Agrawal said financial offences should be investigated while keeping accused individuals outside custody whenever possible. He warned that sudden arrests destroy reputations, weaken investor confidence and discourage future investment, ultimately harming employment and revenue generation.
Current FNCCI president Anjan Shrestha echoed similar concerns, saying businessmen should not be treated like violent criminals in financial investigations. He argued that entrepreneurs are not merely profit-seekers but taxpayers, employers and partners in national development.
Former FNCCI president Chandra Dhakal said the government should focus more on listening to the private sector rather than imprisoning business leaders, warning that public applause gained from arrests could come at the cost of long-term economic confidence.
The controversy also exposed deeper details about the alleged financial network surrounding Himalayan Reinsurance and a powerful business circle informally referred to as the “Himalayan Group.” According to the investigation narrative, businessman Deepak Bhatt and Sulav Agrawal allegedly built extensive political connections and influence that enabled rapid expansion into insurance, reinsurance and financial services.
A major legal debate remains unresolved: Does buying shares on credit amount to money laundering?
Investigators allege that funds from public companies, including Himalayan Reinsurance, Himalayan Life Insurance and associated firms, were used to settle personal share purchases made through Bhrikuti Stock Broking. Securities regulators claim billions of rupees worth of shares were purchased without sufficient collateral or advance payment, with liabilities later covered using company funds.
A report prepared by the Securities Board of Nepal concluded that Deepak Bhatt purchased shares and debentures worth more than Rs 3.8 billion, while large sums linked to Sulav Agrawal’s family were also routed through brokerage accounts. Investigators suspect insider trading, market manipulation and coordinated transactions among interconnected companies and individuals.
The report also alleges that prominent businessmen, including Shekhar Golchha and Rohit Gupta, continued depositing funds into brokerage accounts despite large outstanding liabilities, indirectly facilitating questionable transactions.
Still, a major legal debate remains unresolved: Does buying shares on credit amount to money laundering?
Critics of the investigation argue that money laundering laws are meant to target illegal or “dirty” money disguised as legitimate wealth. In this case, they argue, the transactions involved unpaid liabilities and unsettled share purchases rather than hidden criminal proceeds. According to several experts, margin trading or unauthorized credit-based share purchases may constitute violations of securities regulations, but stretching them into money laundering charges reflects legal overreach and a weak understanding of financial markets.
For Nepal’s private sector, the broader concern now goes beyond this single case. Many fear that if even highly respected businessmen can be publicly arrested despite cooperating with authorities, the message being sent is simple: those who flee may avoid detention, while those who stay back and cooperate risk humiliation, custody and lasting reputational damage.
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