Case Filed Against Former Secretary, Two Others for Rs 5.26 Billion in Nepal Trust Land Scam

The Central Investigation Bureau (CIB) of Nepal Police has filed a case at the Kathmandu District Court against three individuals, including a former secretary of Nepal Trust, and one company in connection with alleged fraud and criminal breach of trust in leasing prime land in Durbarmarg.

According to the CIB, irregularities were found in the leasing of 1 ropani and 14 aanas of land owned by Nepal Trust, resulting in a financial loss of Rs 5.26 billion. The land is located in one of Kathmandu’s most commercially valuable areas.

The Office of the Government Attorney filed the case against then Nepal Trust Secretary Arjun Bahadur Karki, Joint Secretary Lekha Bahadur Karki, and Sonam Sherpa, director of Thamserku Developers (Thamserku Trekking Pvt Ltd) on Wednesday.

The CIB said its month-long investigation established sufficient grounds to conclude that fraud and unlawful financial gains were made during the leasing process. Seven years ago, when Nepal Trust initiated the process to lease land under plot number 4606—measuring about 1.14 ropani—an adjacent plot, number 4605, measuring around 0.24 ropani, was included in the agreement despite not being mentioned in the public notice.

The Bureau concluded that the inclusion of land beyond the publicly notified area was unlawful and formed the basis of a conspiracy to defraud the Trust.

According to the investigation report, the bid evaluation committee had recommended accepting a proposal valued at Rs 6.46 billion, including construction and rental components. However, without any formal review of this recommendation, the final agreement was signed for just Rs 1.59 billion, a move the CIB said violated established public procurement standards and lacked a legal basis.

The charge sheet states that the bid was accepted even after the proposal’s validity period had expired. The agreement differed from the terms and conditions and land area specified in the notice, and the contract value was reduced under the pretext of correcting arithmetic errors. These actions, the CIB said, caused significant financial loss to Nepal Trust.

The Bureau noted that Nepal Trust funds are meant to support education, health and medical treatment for poor and underprivileged citizens, and that such irregularities therefore resulted in losses to the state itself.

The charge sheet alleges that former secretary Arjun Bahadur Karki issued verbal and written instructions to proceed with the process, while Joint Secretary Lekha Bahadur Karki signed the agreement by misusing delegated authority. It further claims that Sonam Sherpa colluded in the process to secure unlawful benefits. All three have been accused of acting in collusion to commit organised fraud and criminal breach of trust.

The charge sheet also notes that although questions over the irregularities had been raised seven years ago, the Commission for the Investigation of Abuse of Authority (CIAA) had shelved the file. Legal experts have said the delayed action and the CIB’s recent filing of the case have raised concerns about inter-agency coordination and accountability.

The CIB has sought punishment under provisions of the Criminal Code, 2017, relating to fraud and criminal breach of trust, and has also stated that the case warrants action under the Organised Crime Prevention Act, 2010. If the charges are proven, the defendants could face imprisonment, fines and recovery of losses incurred by the state.