Kathmandu: A high-profile investigation into financial irregularities has revealed a substantial financial connection between controversial businessman Deepak Bhatta and the prominent industrial house, Shanker Group.
Documents and statements indicate that Shankar Group extended loans totalling Rs 716 million to Bhatta, the Chairman of Infinity Holdings, through multiple transactions. This revelation comes as the Department of Money Laundering Investigation continues to hold both Bhatta and Sulabh Agrawal, Executive Director of Shanker Group, in custody. The duo was arrested approximately two months ago, Bhatta on April 1 and Agrawal on April 3, as part of a broader crackdown on the alleged misuse of funds from Himalayan Reinsurance and other insurance entities to manipulate the stock market.
The Central Investigation Bureau (CIB) has already submitted a report to the Government Attorney’s Office recommending the prosecution of 40 individuals, including Bhatta and Agrawal, on charges related to insurance crimes and massive financial fraud.
While the government attorney has yet to file formal charges, the trail of Bhatta’s assets led investigators directly to the Shanker Group. According to officials involved in the probe, the money was transferred using formal banking channels, which the Shanker Group has acknowledged. Sources within the group maintain that the Rs 716 million was a legitimate series of loans provided across nearly a dozen instalments, and they intend to seek full repayment once Bhatta is released from custody.
The investigation previously gained momentum when the Financial Information Unit (FIU) of Nepal Rastra Bank flagged a suspicious transfer of Rs 450 million from Jagdamba Steel, a subsidiary of the Shanker Group, to Bhatta’s personal account in 2022. It was discovered that the steel company had funnelled bank-borrowed funds to Bhatt as a personal loan.
While sources suggest that a specific portion was settled with interest two years later, the total outstanding financial engagement remains a focal point for money laundering investigators. The sheer scale of these personal loans between a corporate giant and an individual has raised red flags regarding the ultimate purpose and destination of these funds, especially as they were reportedly used to expand Bhatta’s investments across various companies.
A significant rift has emerged between the two former associates as they attempt to distance themselves from the alleged stock market manipulation. Bhatta has claimed in his statements to the CIB that his Bhrikuti Stock Broker account was used without his authorization to purchase and “dump” shares at inflated prices. He alleged that his trading system (TMS) was operated by others from an external location.
Conversely, Sulabh Agrawal has denied any personal financial dealings with Bhatta, though he admitted his family members might have outstanding transactions. Regarding the identical IP addresses used for their respective stock trades, Agrawal offered a unique defence, suggesting that Bhatta or his staff frequently visited the Shanker Group office and may have simply used the “free Wi-Fi,” thereby linking their digital footprints.
This developing legal battle marks the collapse of a powerful business alliance that gained notoriety during the COVID-19 pandemic for its perceived influence over state machinery and market dominance. While Shanker Group officials emphasize that their relationship with Bhatta was strictly a personal financial arrangement rather than a formal business partnership, investigators face the daunting task of proving whether these “loans” were a cover for illicit financial schemes.
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