A scandal in Kathmandu rocks the Prachanda govt and threatens the system

Bharat Bhushan

Indians, obsessed with Pakistan going down the tube, seem unable to smell the rot that has set in Nepal’s polity and administration. Nepal’s Prime Minister Pushpa Kamal Dahal, aka Prachanda, is facing one of the worst corruption scandals to have hit the country since it became a democracy. If he acts against the corrupt, his government could fall; if he doesn’t, people will lose faith in the political system.

Prominent Nepalese political leaders and top bureaucrats allegedly conspired under two previous regimes to pass off Nepalese citizens as Bhutanese refugees to help them settle in the US and other developed countries in exchange for millions of rupees. The accused include a former deputy prime minister, a former home minister, his son and a current MP, along with a security advisor, the chairman of the Nepal Haj Committee, an exiled Bhutanese democracy activist, Tek Nath Rizal and scores of home ministry bureaucrats and brokers. 

Former deputy PM, Top Bahadur Raimajhi, now arrested, served under former PM K P Sharma Oli of the Communist Party of Nepal (Unified Marxist Leninist) or UML. His son, Sandeep Raimajhi, has also been arrested. Also arrested is Balkrishna Khand, home minister in the last government of PM Sher Bahadur Deuba. Khand’s wife, Manju Khand, a serving MP, is an accused. She is absconding and apparently in Australia.

Allegations are that the government facilitated Manju Khand’s escape, as questioning her could lead to the exposure of other prominent personalities. An audio recording submitted by a victim claims that money was paid not only to Manju Khand but also to another serving MP, Arzu Deuba, wife of former PM Sher Bahadur Deuba and president of the Nepali Congress.

Nepal media has scooped portions of the audio recording where the victim claims that “Rs 25 million were given to Arzu” and “Rs 60 million to Bal Krishna Khand”, which was allegedly received by his wife Manju Khand at their home in Hanumanthan in Kathmandu. The Khands and Arzu Deuba have denied involvement in the conspiracy. However, the extent of the alleged connivance of those in high echelons of public life is still staggering. One of the main accused also includes a former personal secretary to Nepali Congress leader, Sujata Koirala. A total number of 16 people have been arrested so far.

The refugees in question, Lhotshampas (Bhutanese of Nepalese origin), were expelled by Bhutan in 1990 in a massive ethnic cleansing effort. They ended up in refugee camps in Eastern Nepal after Bhutan refused to take them back. The UN High Commissioner for Refugees (UNHCR) facilitated their resettlement in various countries, including the US, Canada, Australia, New Zealand, Denmark, Norway, Britain and the Netherlands. About 113,000 Bhutanese refugees were thus rehabilitated in third countries. This programme came to an end in December 2016.

An estimated 3,000 to 6,000 refugees remained in Nepal either because their documentation did not meet UNHCR requirements or they chose to stay. Some of those left out appealed to the Nepal government to plead their case for resettlement abroad. A committee was set up to look into the issue, which identified 429 Bhutanese refugees deserving of resettlement abroad. The conspiracy to defraud began after the committee’s report was submitted. K P Oli, then PM, set up a task force to study the report, which had no expert on refugees. In the task force report, the original 429 names were replaced by 873 “fake Bhutanese refugees” who were Nepali citizens. They were charged anywhere between Nepalese Rs 15 to 20 lakh per person, and some claimed, even Nepalese Rs 50 lakh, for the promised resettlement.

Two victims filed an FIR in June 2022. Two persons were arrested but mysteriously released. A former police officer has accused Balkrishna Khand, the then home minister, of releasing the accused. A year later, some victims approached various political leaders who did nothing. This year the police arrested three accused on March 26 and began an investigation. Then in May, an independent MP, Amaresh Kumar Singh, a former student of Jawaharlal Nehru University in Delhi, insisted on speaking about the conspiracy in Parliament, dramatically removing his shirt to assert his right to do so. Now, more victims have come forward, with 106 FIRs being lodged.

It is clear that while the conspiracy was hatched during the tenure of PM Oli of UML, it was operationalised under the prime ministership of Sher Bahadur Deuba of the Nepali Congress. Prachanda’s dilemma is that he cannot target those who hatched the conspiracy without touching those who followed it up. The public wants him to get to the bottom of the conspiracy and punish all involved, including all political leaders, irrespective of their party.

Prachanda’s quandary is that his coalition government includes the Nepali Congress. Were he to act against those accused who are prominent in the Nepali Congress, there is a fair chance that Oli and Deuba will gang up against him. Political survival may then compel him to ensure that the heat reaches too close neither to the leadership of UML nor the Nepali Congress.

The police will have to choose whether to charge everyone arrested and absconded with the same offences of cheating, fraud, conspiracy, organised crime and sedition – or to distinguish between the brokers and bureaucrats on the one hand and the politicians allegedly involved on the other. Kathmandu is rife with speculation that the brokers and bureaucrats will be charged with serious offences, while those against the politicians will be less severe, diluted and difficult to prove, and potentially enable them to be discharged by the courts. Prachanda’s government would then survive but rot within the political system, and the bureaucracy would remain.

Delhi’s policies towards Nepal only seem to be ruled by ideological considerations such as restoring a Hindu monarchy or by alarm at China’s influence. It does not seem concerned that the Nepali polity is coming apart at the seams.