Kathmandu: A high-profile banking offence case has been formally filed at the Patan High Court against the directors of Jagdamba Steels Limited and Deepak Bhatta, the Chairman of Infinity Holdings.
The Special Government Attorney’s Office initiated the proceedings following a rigorous investigation by the Central Investigation Bureau (CIB) and a supervision report from Nepal Rastra Bank. The prosecution is seeking the recovery of approximately Rs 421.4 million in misappropriated funds, alongside equivalent fines and prison sentences for the accused.
The charge sheet names Sahil Agrawal, Chairman of Jagdamba Steels, along with account operators Sulav Agrawal and Shankarlal Agrawal, and businessman Deepak Bhatta as the primary defendants. They are accused of colluding to embezzle credit facilities obtained from a consortium of financial institutions, including Nepal Investment Mega Bank, Nepal SBI Bank, Kumari Bank, Everest Bank, and the Agricultural Development Bank. The prosecution alleges that the defendants systematically violated banking regulations to divert corporate loans for unauthorized personal investments.
According to the investigation, Jagdamba Steels had secured working capital and short-term loans intended specifically for the procurement of industrial raw materials and daily operational requirements. However, instead of utilizing the funds for their stated purpose, a staggering Rs 545 million was funnelled into Deepak Bhatta’s personal account at Siddhartha Bank.
While the defendants attempted to justify this transfer as an earnest money deposit for a land transaction, Nepal Rastra Bank’s supervision report clarified that the capital was actually diverted to purchase promoter shares in Himalayan Re-Insurance.
The CIB’s findings suggest a sophisticated “money layering” scheme designed to mislead both the lending banks and regulatory bodies. The diverted funds were moved from the bank to Bhatta’s personal account, then transferred to the accounts of Infinity Holdings before finally being used for equity investments. To provide a veneer of legitimacy to these transfers, the defendants reportedly prepared fraudulent land purchase agreements, which the investigative bureau has dismissed as a deceptive cover for the illicit movement of capital.
In his defence statement, Deepak Bhatta claimed that the transaction was a legitimate business deal for land acquisition that eventually fell through, leading him to return the principal amount with interest. However, the government attorney has rejected this explanation, framing the transaction as a clear violation of Section 8 of the Banking Offence and Punishment Act, 2064, which prohibits the misuse of credit. Consequently, the prosecution has demanded that the defendants pay a total recovery amount of Rs 421,488,807.07 and face the maximum penalties prescribed under the law.
As the legal proceedings begin, the court has been requested to issue arrest warrants for Sahil and Shankarlal Agrawal, who are currently reported to be absconding. This landmark case originated from a special on-site inspection by the central bank’s supervision department, which flagged the suspicious nature of the fund transfers and subsequently alerted the criminal investigation authorities to a potential breach of the nation’s banking and financial laws.
Comment Here