A businessman was looking for land to build a showroom and warehouse for construction materials. He found 7,187.25 sq. ft of land, in Satdobato, near to ANFA complex, which was owned by Rabindra Chaulagain, owner of Deurali Multipurpose Cooperative Limited.
Chaulagain said that there was no bank loan on the land and he would pass it on immediately at Rs 8.5 million per sq ft, which means Rs 170.85 million in total. The man was happy and decided to meet Chaulagain to pay him an advance and start the process of acquiring the land.
Before paying the advance, the businessman sent his employee to the Department of Land Reform and Management (DOLRM) office at Lagankhel, to confirm if there were any issues with the land. To his surprise, the businessman found the land had been mortgaged to take out a loan of Rs 180.5 million from Mega Bank (now Nepal Mega Investment Bank).
“Although I saved myself from being deceived, I was surprised to know how a bank agreed to give a Rs 180.5 million loan while the current valuation rate of land was Rs 170.85 million,” says the businessman asking to remain anonymous. “I am surprised because the bank only gives 40 per cent of the total mortgage valuation of the land.”
Rabindra Chaulagain has posed a risk to five banks by taking loans through similar mortgages. According to data, he has taken out loans amounting to Rs 4 billion from 10 banks. Details have now emerged that the valuation of the mortgage provided by Chaulagain is significantly lower than half of the total loan amount.
He has taken out a loan of Rs 2.05 billion from Century Bank, which now has merged with Prabhu Bank. Chaulagain’s land in Satdobato has been mortgaged for a loan of Rs 250 million from Citizens Bank and Rs 180 million from Mega Bank (currently Nepal Investment Mega Bank).
His company Puja Marketing has taken out a loan of Rs 7 million from NIC Asia Bank, says a bank source. There is another additional loan from the then Mega Bank. Similarly, he has also taken a huge amount of loan from Machhapuchre Bank. Both banks did not disclose the amount.
In an informal meeting between the banks that provided loans to Chaulagain, they concluded that their investment of more than Rs 4 billion is at risk.
Chaulagain is currently on the run and evading the authorities after failing to repay the Rs 3 billion deposited by cooperative members and the Rs 4 billion loaned by the bank. He had taken loans in the name of Pooja Marketing, Pooja Trading and Marketing Company, Sri Sri Brothers Marketing and Annapurna Distillery. He has also taken a loan in his name.
Bad debt
Bank sources have revealed that despite issuing three auction notices for the mortgage due to non-payment of the loan, it seems that the property will not be successfully auctioned.
“The debt is Rs 2.25 billion and the value of the mortgaged property is not even half the amount of the loan. Given the current situation of the country, it is almost impossible to find a customer to auction these properties. We feel there is no possibility of recovering the debt through the sale of his property,” says the source of one bank.
Other banks face a similar problem. Since Chaulagain has fled, the cooperatives and other companies under his ownership have ceased operations. An official linked to Deurali Cooperative has disclosed that many of the properties have been subjected to secondary or tertiary liens due to legal action taken by individuals who had lent money to Chaulagain.
Radha Krishna Khatiwada, undersecretary of the Cooperative Division at Bagmati Province Ministry of Tourism Industry and Cooperatives informed that Deurali Cooperative has not submitted the annual report and audit report since fiscal year 2017/18.
Section 73 of the Cooperative Act 2017, states cooperatives must submit quarterly and annual statements of business and audit reports each year. It should also provide information related to the annual general meeting to the Registrar of Cooperatives and to the related office.
Similarly, Section 88 of the act mention cooperatives which are inactive for two years should be dissolved. In the same section, there is a provision that the cooperative will be terminated if it acts against the values and principles of the cooperative.
That means, according to law, Deurali Cooperative should be dissolved. However, it has been revealed that Rs 2.07 billion were raised illegally in the name of the cooperative without submitting the audit report and report of the annual general meeting.
According to a record of the cooperative division of the Bagmati province, Deurali Cooperative, established in 2014, had collected a total of Rs 210 million in deposits till 2017/18. But sources say its deposits have increased to Rs 3 billion.
Until the previous year, 20 thousand depositors had put money into the cooperative. Investigations have revealed that the depositors’ funds were invested in land under the name of Chaulagain’s personal company.
Chaulagain was associated with multiple companies, including RR Group of Companies, Shree Pooja Poultry Farm, Deurali Properties, Moon Venture Investments, RR Research and Development, Pooja Marketing, Pooja Trading and Marketing Company, Shree Shree Brothers Marketing and Annapurna Distillery.
According to the sources, some of these companies were in operation while some were only established to take out loans.
“By misusing the co-operative’s money he bought land for Rs 10 million, and mortgaged the same land and took a loan of Rs 30-40 million from the bank,” says a source associated with the co-operative.
Reckless investment in land
According to information received from sources, a few hundred acres of land have been found in the name of Chaulagain and his wife Pooja Khatri. Chaulagain’s family has 459,618.97 sq ft of land in Lamatar of Lalitpur, 6,917.4 sq ft of land in Dhapakhel and 5,548.4 sq ft of land in Sunakothi and Harisiddhi have been found under his name.
According to a detail obtained by Onlinekhabar, Chaulagain has 6,458.35 sq ft of land in Satdobato; 2152.78 sq ft in Madhyapur Thimi; 6,845 sq ft in Sunakothi; 1,369 sq ft in Kirtipur; 3,422.5 sq ft in Gwarko; 4,107 sq ft in Dhobighat; and 2,053.5 sq ft in Banepa.
Similarly, there are 2,395.75 sq ft of land in Panchkhal in Rajendra Khatri’s name, who is Pooja Khatri’s brother. Chaulagai claims that he owns 4,374,000 sq ft of land in Meghauli, Chitwan.
However, the sources claim that only advance payment of the land has been made and he does not have complete ownership of the land he claims.
His haphazard investments in land is how he lost all the money. Knowing he cannot pay everyone back, he organised a press conference on August 23, 2022, and announced that he would return up to Rs 500,000 in cash and transfer land ownership for the remaining amount.
Chaulagain said he had 4,155,300 sq ft of land in Chitwan which he would divide into plots and distribute to people. Kedar Prasad Chaulagain, the coordinator of the Savings Committee, took the initiative to divide the land and hand it over to the depositors.
Griham Builders and Consultancy Company was established under the joint names of depositors Krishna Prasad Kandel, Jeevan Shrestha, and Nakul Prasad Acharya. Depositors were informed that their investments would be matched with land or that the funds received from a land sale by the company would be returned to them.
Sources close to the cooperative say that 102,060 sq ft of land was been transferred in the Griham Builders and Consultancy Company’s name, but most of the depositors’ money has not been returned yet. It has not been disclosed where the money worth 102,060 sq ft of land was spent and how.
Chaulagain issued cheques to major depositors, indicating he only owed people Rs 800 million. But the checks have not been cashed in. Frustrated by this situation, depositors lodged a complaint with the police. Regrettably, it is reported that the police refused to register the complaint, as stated by one of the depositors.
With no other option, the depositors are now staging a protest at Maitighar Mandala. Some of them then went to the cooperative department and pressured the officials to write a letter to arrest Chaulagain.
After 196 depositors of Deurali Cooperative filed a complaint, the department sent a letter to the Central Investigation Bureau (CIB) on June 27, asking it to arrest Chaulagain and investigate the case. However, Chaulagai has not been arrested yet.
“We have already started our investigation on Deurali Cooperative,” says AIG Kiran Bajracharya, “CIB has already received the file related to the case. The initial investigation has already started.”
This story was translated from the original Nepali version and edited for clarity and length.
