Kathmandu: Nepal’s influential business house, the Triveni Group, has been accused of causing the state to lose millions of rupees by leveraging political access and influence. The allegations stem from supplementary agreements signed after the privatization of the Nepal Tea Development Corporation, where the group served as a director. Those agreements reportedly slashed rental obligations and waived interest payments, resulting in major financial losses to the government.
The state-owned corporation was privatized after being acquired by the Sanghai family’s Triveni Group. Established in 1974 as a public company, the corporation sold a 65 percent stake to the Triveni Group in 2000, while the Government of Nepal retained the remaining 35 percent ownership. That stake is equally divided among the Ministries of Agriculture, Finance, Industry, and the National Planning Commission.
The corporation currently collects and processes tea from seven tea estates in Jhapa and Ilam districts. It also produces Nepal’s well-known “Tokla” tea brand. Although the corporation cultivates tea across 1,087 hectares and has the capacity to expand further, management disputes and legal complications have prevented it from making the level of contribution to state revenue that was originally expected.
The privatization was intended to strengthen Nepal’s tea industry, but weak enforcement of the original agreement and controversial supplementary deals allegedly made under political influence have raised serious concerns about governance and accountability.
The Nepal Tea Development Corporation remains one of the country’s largest tea producers. However, serious legal irregularities and financial mismanagement have surfaced in the privatization process. Even after 24 years under private management, millions of rupees in unpaid rent and accumulated interest owed by the corporation have yet to reach state coffers.
The Office of the Auditor General, in its 61st annual report, questioned both the privatization process and the supplementary agreements signed afterwards, stating that the government suffered substantial financial losses as a result.
Under the original agreement signed on June 28, 2000, between the Government of Nepal and the Triveni Group, the corporation was privatized for a 15-year term. The deal required the company to pay an annual rent of Rs. 28 million for the use of 5,196.34 acres of land, with rent revisions scheduled every five years.
However, a supplementary agreement introduced in 2007 following a Cabinet decision dramatically altered those terms. Effective from 2005, the annual rent was reduced from tens of millions of rupees to just Rs. 4 million per year. According to the Auditor General, the original agreement explicitly prohibited revisions to the rental rate, making the supplementary deal legally questionable.
The report states that between 2000 and 2005, the corporation accumulated unpaid rent totalling Rs. 107.34 million. Although the amount was supposed to be cleared within ten years, the corporation had paid only Rs. 87.38 million by mid-July 2024.
More significantly, the government has reportedly failed to recover interest on the delayed payments. Clause 26 of the agreement stipulates a 15 percent interest rate on overdue amounts. Based on that provision, unpaid interest for seven years alone amounts to Rs. 91.75 million, with an additional Rs. 23.95 million due on the remaining principal. The Auditor General has instructed the government to immediately determine and recover the full outstanding principal and interest.
The report also questioned the legal basis for recommendations made by a study committee that proposed adjusting rent based on pricing benchmarks from the International Tea Committee. According to the Auditor General, the rent reduction — carried out in disregard of the original agreement and seemingly in favour of the private company — directly harmed the state financially.
Comment Here