Something about the title first. Sumargi, in Nepalese, means “someone on the right path,” and Kumargi, “someone on the wrong path.” The story is about someone called Sumargi!
2004-7, when I was living and working in Malawi, I used to take comfort in the belief that Nepal wasn’t as corrupt. They pretty much also had a dictator!
2007-10, when I was living and working in Azerbaijan, it was the same; I would tell people there that Nepal was nowhere near as corrupt! And, there, they did have a dictator.
Little did I know Nepal was progressing fast catching up to those countries in the corruption scale. If you ask me now, we are so corrupt, Nepal is essentially a failed state, sadly!
And only in lawless Nepal could something like the following happen. It provides some insight into how things work in the country and why they don’t work the way they are supposed to!
I came across the article and posted it on my Facebook wall (see image) in late June. (Since posting it, I have discovered that I had made a mistake with the numbers–I mistook ‘paune teen’ to be 3.15 instead of 2.75!)
The original article is in Nepali, but here’s the translation. It was done by the same person who translated Roshan Kumar’s story. (Click here for an image of the original article. Hyperlinks are my addition.)
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Rastra [Central] Bank freezes Sumargi’s ‘Black Money’
2.75 billion trapped in Nabil and Investment Bank
Kathmadu, Asad 13 [27 June, 2014] – The Nepal Rastra [Central] Bank put a freeze on Ajay Sumargi’s 2.75 billion rupees [~US$28 million]. According to a highly placed source at the bank, the bank froze the funds because, though brought into the country by Sumargi calling it foreign investment, they were illegally amassed.
The bank put a freeze on this amount belonging to Sumargi, who has been close to the ruling party leaders, after they discovered that he had been laundering black money (through hundi) out of the country and bringing it back into the country as foreign investment to make them legitimate. Of the total, 2 billion [>US$20 million] was wired to Nabil Bank and the rest to Investment Bank.
Nepal Rastra Bank requires and seeks information on the income source of dollars coming into Nepal from abroad. The Central Bank freezes foreign currencies arriving in the country without such information. In this case, the money appears to have been wired by an offshore company, calling itself Joda Investment, to Nabil and Investment Bank identifying Sumargi as the beneficiary. But, owing to lack of sufficient evidence and support documents proving the funds as genuine investment, Nepal Rastra Bank investigated the transfer.
In the course of investigation, the owner of Joda Investment was discovered to be no other than Sumargi himself! As he was found to be attempting to bring into the country his own black money, illegally, as foreign investment, the Bank put a hold on this money, according to the source. Sumargi was also found to have not obtained the necessary approval from the Department of Industry, as required by law when bringing foreign investment into the country.
Sumargi appears to have also tried to get his hands on foreign investment projects by keeping, in the dark, the Investment Board, formed when Dr. Baburam Bhattarai had been the Prime Minister. Following the Rastra Bank freezing his funds, he began frequenting Prime Minister Sushil Koirala’s residence in Baluwatar. But not receiving assistance, Sumargi was left disappointed.
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When I first read this article, I figured there must be more to the story and so kept my eyes open for reports alluding to it and/or with more details about this. And sure enough, the third week of September I came across this article.
The more important question is of course: How often does something like this happen that people like us know nothing about?
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Update Feb. 1, 2016 (in the US).
The following update to the story was published on Kantipur today (February 2) in Kathmandu.
Update Dec. 29, 2017
The following update to the story was published on Kantipur today.
Update Sept. 6, 2018
According to Forbes, Sumargi now is the 4th richest Nepali of 2018.
Update Sept. 16, 2018
Here are some more articles I came across just today. NRB to seek more details from Sumargi was published in The Kathmandu Post on Feb. 2, 2016. Then a serious of three articles in also The Kathmandu Post within ….days the beginning of this year. Maoist leader asks govt to investigate Sumargi’s case was published on January 19, 2018. Probe into Sumargi’s property in 2nd phase: Minister Rana was published just two days later, on January 21. And DMLI starts detailed probe in Sumargi case was published on January 24.
According to the January 24 article,
Sumargi and his companies have so far received $118 million (approximately Rs12.1 billion) and 380,000 pounds sterling (around Rs 52.6 million) from “suspicious companies” based in the British Virgin Islands, Cyprus, Egypt and Belarus, shows a government report.
This money, most in the form of loans, started entering the country as early as January 2008 via Nabil Bank. Nepal Invest-ment Bank Limited has also been used for fund transfers since, which continued until November 2013. Of the money that entered Nepal, only $28.5 million (approximately Rs2.9 billion) forwarded to the accounts of Nepal Satellite Telecom and Mukti Shree Cement has been frozen at the NIBL in the absence of necessary documents. Sources said that a portion of the funds that landed at Nabil Bank has also been frozen, but the Post could not confirm the amount.
The beneficiaries of 97 percent of the funds are four firms owned by Sumargi—Nepal Satellite Telecom, Mukti Shree Pvt Ltd, Mukti Shree Cement and Mukti Shree Telecom. But only Mukti Shree Cement and Nepal Satellite sought permission to bring in foreign investment, that too for mere $30.9 million (approximately Rs3.2 billion).
This means $87.1 million and 380,000 pounds (approximately Rs9 billion) were brought in without permission from the authorities.