Pokhara co-op fraud suspects freed after pledging to repay embezzled funds

POKHARA: Defendants arrested for investigation into embezzlement of nearly Rs 900 million at Pokhara Savings and Credit Cooperative have been released on personal recognizance.

The Kaski District Attorney’s Office released them without filing a charge sheet before the court on the condition that the embezzled amount would be returned to the depositors.

According to District Government Attorney Kamala Kafle, the defendants have been released from custody with the consent of the victims. “Their asset and properties have been frozen to prevent them from absconding. We released them after they expressed commitment to gradually repay the misappropriated funds,” she added.

The District Police Office, Kaski, had taken eight individuals, including the cooperative chairperson, office-bearers, and the manager, into custody for investigation on November 5, based on a report that Rs 887.09 million had been embezzled from the cooperative.

Those arrested include Cooperative Chairperson Surendra Bahadur Godar, Vice Chairperson Shambhu Raj Bastola, Secretary Dil Bahadur KC, Treasurer and Credit Coordinator Hiramani Dahal, Manager Bhishma Pratap Gurung, Board Directors Indra Prasad Dwa and Dorje Tamang, and Marketing Chief Bedi Prasad Subedi. They were released on Friday.

The cooperative operates across Kaski district and has around 4,000 depositors.

Depositors began filing complaints with the Cooperative Registrar’s Office two years ago after the cooperative failed to return savings. The Office launched a probe into the cooperative after the number of complaints increased in recent months.

Following an investigation led by financial analyst Nirmal Gautam, the Cooperative Registrar’s Office submitted its report to the District Police Office, Kaski, requesting it to take legal action.

Ganja Bahadur Gurung, coordinator of the Cooperative Problem Resolution Committee, said 1,416 victims have been identified so far. Among them, 1,124 have deposits below Rs 10,000.

Gurung said they agreed to release the cooperative officials after they expressed commitment to repaying the victims from their own property and assets. “We have asked the cooperative’s board to present a roadmap for resolving the problem this Saturday. After studying their roadmap, we will decide how to move forward,” he said. “Preparations are underway to form a high-level committee to act as a watchdog.”

District Government Kafle said the government attorney has the authority to facilitate a settlement in fraud cases. “Since the defendants have begun depositing money, the cooperative’s assets have been frozen, funds are being credited to victims’ accounts, and loan recovery is underway, they have been given an opportunity. If the funds are not returned, a charge sheet will be filed in court as per legal provisions,” she added.

According to sources, the management committee was told to settle the fraud case last in June itself. Legal action was initiated after it failed to do anything concrete in the past five months.

Gandaki Province Cooperative Registrar Bhesh Raj Rijal said numerous fake borrowers had been created in the cooperative to siphon off large sums of money. “We have not spared the borrowers either,” he said. “There are around 300 overdue and bad borrowers. In total, around 400 individuals, including current and former board directors, managers, office-bearers, and those holding responsible positions, appear to be at fault.”

According to the report, around Rs 300-350 million remains to be recovered from borrowers alone.