The Butwal bench of the Tulsipur High Court on Thursday, December 18, ordered the release of former Deputy Prime Minister Rabi Lamichhane, Chairman of the Rastriya Swatantra Party (RSP), on bail.
Lamichhane has been in judicial custody over allegations of embezzling depositors’ funds from the Butwal-based Supreme Cooperative. A division bench comprising Chief Judge Basudev Acharya and Judge Tej Narayan Paudel directed that Lamichhane be released upon depositing bail equivalent to the alleged loss of Rs 27.48 million.
RSP Vice-Chair Swarnim Wagle welcomed the decision, posting on social media: “Now, we must take our campaign to the next level.”
Read: Rabi Lamichhane Arrested for Alleged Involvement in Misuse of Cooperative Funds
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Lamichhane has been held at Nakkhu Prison in Lalitpur since mid-August 2025, except for a brief period in September when he was ‘released’ amid nationwide unrest during the Gen Z-led protests and demonstrations on September 9.
While Lamichhane has maintained that the prison authorities asked him to step out to help restore order after thousands reached the prison demanding his release, many have blamed him and his party cadres for the incident that led to prisoners across the country escaping during the chaos.
The Department of Prison Management had transferred Lamichhane to Nakkhu on August 16, 2025, from Rupandehi. He had been in custody at Rupandehi since early April 2025, following a remand order by the Butwal Bench of the Tulsipur High Court in connection with an ongoing cooperative fraud and organized crime case.
The High Court’s decision overturned an earlier ruling by the Rupandehi District Court, which had granted Lamichhane conditional release on a bail of Rs 10 million.
The ruling and subsequent arrest came just a day before a scheduled RSP event in Chitwan. Lamichhane had represented Chitwan-2 in the House of Representatives, which was dissolved in September following the Gen Z protests. The Federal Parliament had suspended him as a lawmaker on December 23, 2024.
Read: RSP Chief Lamichhane Released After 84 Days in Custody
Read: Government Centralizes Authority to Regulate Cooperatives after Six Years
Read: Recovery of Funds from Cooperatives Unlikely as their Liabilities Exceed Assets
Lamichhane was first arrested on October 18, 2024, at his party office in Kathmandu and transferred to Pokhara, Kaski, for investigation into alleged financial irregularities at the Surya Darshan Cooperative. His arrest followed a parliamentary committee’s recommendation that legal action be taken against him for the alleged misappropriation of cooperative funds.
On January 9, 2025, the District Police Office, Kaski, released Lamichhane on Rs 6.5 million bail after 84 days in custody, following an order from the District Court, Kaski. Subsequently, on January 15, 2025, the Kathmandu District Court ordered to release him on Rs 6 million bail in connection with a case involving the Kathmandu-based Swarnalaxmi Cooperative.
However, in early February 2025, the District Court, Chitwan, sent Lamichhane back to custody after his detention hearing on charges of embezzling funds from the Chitwan-based Sahara Multi-purpose Cooperative remained incomplete.
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