In yet another case of detention of a top-level banking executive involved in banking fraud, Police on Sunday arrested Shyam Bahadur Shrestha, former executive chairman of Samjhana Finance that is currently under the liquidation process. A team of Nepal Police's Central Investigation Bureau (CIB) arrested Shrestha from his residence at Golkupakha, Kathmandu. He has been charged with misappropriation of public deposits worth Rs 20 million. DIG Rajendra Singh Bhandari, chief of CIB, said Shrestha's arrest was a part of the massive hunt initiated to track down top BFI executives involved in banking fraud.
The Nepal Rastra Bank had asked the police in February to initiate legal action against Shrestha, immediate chief executive officer of the company Hem Bahadur Gurung and senior managers Saroj Bajracharya, Bijayamani Acharya, Prabin Kumar Khanal and Pawan Kumar Khanal as per the Banking Offense and Punishment Act. The central bank said these officials were involved in taking loans for themselves and their kin without putting up adequate collateral which affected the institution's financial health. The Due Diligence Audit (DDA) report of Samjhana revealed that its promoters cheated the regulator, shareholders, auditors and depositors by maintaining hidden accounts of deposits and credit for the last eight years. The hidden accounts were never shown during the company's regular auditing.
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