Nepal’s former Deputy Prime Minister and Rashtriya Swatantra Party (RSP) Chief, Rabi Lamichhane, was arrested on Friday in connection with a massive cooperative fraud case that has rocked the country.
The Central Investigation Bureau (CIB) raided Lamichhane’s party office in Banasthali, on the outskirts of Kathmandu, and detained him on charges of embezzling Rs 850 million from the Pokhara-based Surya Darshan cooperative, media reports say.
Lamichhane, who is also the Vice Chairman of Galaxy Media, is accused of illegally diverting funds from the cooperative. The arrest follows an arrest warrant issued by the Kaski District Court after a parliamentary probe committee found that Rs 1.35 billion had been misused from Surya Darshan, Gorkha Media Network, and other cooperative institutions.
The investigation linked Lamichhane directly to the financial mismanagement, pointing out that the misappropriations occurred during his time as the managing director of the now-defunct media company. The report also implicated several other individuals connected to the fraudulent activities.
Before his arrest, Lamichhane decried the charges against him, stating that the arrest “marks the countdown of the Oli regime,” suggesting that his detention was politically motivated and aimed at weakening his party, which is the fourth-largest in the country’s Parliament.
This case is the latest development in a long-standing issue of widespread corruption and embezzlement in Nepal’s cooperative sector. The Nepal government recently confirmed that 40 cooperatives across the country have swindled Rs 87 billion from depositors, devastating tens of thousands of families who entrusted their life savings to these institutions.
Despite previous probes and multiple parliamentary committees being formed to address the crises in cooperatives, little progress has been made in recovering the lost funds. In 2013, a commission revealed that 22,170 depositors had been defrauded of Rs 10 billion, but little action was taken to bring the perpetrators to justice.
Over the years, more than 400 victims have lost their lives due to the financial collapse of these cooperatives, with many committing suicide after losing their savings. The recent arrest of Lamichhane is seen as a major turning point in the push to hold those responsible for the cooperative frauds accountable. However, critics remain skeptical of the government’s willingness to fully tackle the systemic corruption that has plagued the sector for years.
As the investigation unfolds, the case has further highlighted the urgent need for reforms in Nepal’s financial and cooperative sectors to protect depositors and prevent such tragedies from reoccurring.
