In a major crackdown on financial crime, the Office of the Government Attorney has filed a massive corruption case at the Kathmandu District Court against 42 individuals. The group is accused of organized financial crime, insider trading, and market manipulation, resulting in the embezzlement of over Rs 3.5 billion in public and insured savings.

Following the charge sheet, 32 incumbent office-bearers have been automatically suspended, while 8 former high-ranking officials and regulatory heads have been dragged to court.

1. Suspended Incumbent Officials (32 Persons)

Under Section 142 of the Insurance Act, 2079, the following current directors, CEOs, and investment committee members are barred from any insurance-related responsibilities until the court reaches a final verdict:

1. Nepal Micro Insurance Company Limited (8)

• Mrigendra Nath Rimal – Chief Executive Officer (CEO)
• Siddhanta Jhunjhunwala – Board Member
• Latika Golyan – Board Member
• Sunita Shrestha – Board Member
• Anup Malakar – Board Member
• Badri Sigdel – Board Member
• Prabina Dahal – Board Member & Chairman of Investment Committee
• Sujal Malla – Investment Committee Member

1. Himalayan Reinsurance Limited (8)

• Upasana Poudel – Chief Executive Officer (CEO)
• Amit Mor – Director
• Shahil Agrawal – Board Member & Convenor of Investment Committee
• Rohit Gupta – Board Member
• Rajiv Mor – Director
• Shuvechya Kharel- Director
• Subhash Kumar Jhunjhunwala – Director
• Manish Kumar – Investment Committee Member

1. Himalaya Securities Banker Limited & Subsidiaries (6)

• Subhash Bahadur Shrestha – CEO, Himalaya Securities Banker Ltd.
• Deepak Kumar Shrestha – Board Chairman, Himalaya Securities Banker Ltd.
• Sitaram Wagle – Director, Himalaya Securities Banker Ltd.
• Akanksha Gupta – Director, Himalaya Securities Banker Ltd.
• Shishir Gaihe – President, Himalayan Capserv Ltd.
• Ritesh Pradhan – CEO, Himalayan Capserv Ltd.

1. Himalayan Investment Bankers & Associated Institutions (8)

• Kapil Kumar Dahal – Board Chairman (also CEO of Himalayan Life Insurance)
• Rajan Prasad Adhikari – Board Member (also Assistant CEO of Himalayan Life)
• Binu Ghimire – Board Member
• Narayan Kumar Adhikari – Board Member
• Utsav Pradhananga – Board Member
• Subhash Poudel – Investment Member & Chief Operating Officer
• Shalini Sanghai – Investment Member
• Pratik Joshi – Investment Member

1. Heads of Affiliated Organizations (2)

• Deepak Bhatt – Board Chairman, Infinity Holding Pvt. Ltd. (Accused as the Master Planner)
• Sandeep Chachan Agrawal – Executive Chairman, Bhrikuti Stock Broking Company Pvt. Ltd. (Broker No. 55)

2. Former Officials and Affiliated Businessmen Sued (8+2)

The Central Investigation Bureau (CIB) and regulatory probes revealed that past leaders and regulators actively participated in or enabled the fraud:

1. Sharad Ojha – Former Chairman, Nepal Insurance Authority (Regulatory Body)
2. Madan Dahal – Former Chairman, Nepal Insurance Authority (Regulatory Body)
3. Ashish Shrestha – Former Chairman, Nepal Micro Insurance Company Ltd.
4. Shekhar Golchha – Former Chairman, Himalayan Reinsurance Ltd.
5. Bidur Puri – Former Director, Himalayan Investment Banker
6. Shumer Shumsher JBR – Investment Coordinator & Former CEO (Suspended), Himalayan Investment Banker
7. Shulabh Agrawal – Former Director, Himalayan Life Insurance Ltd.
8. Rishi Raj Mor – Then-Chairman, Crest Micro Life Insurance Ltd.

Note on Affiliated Defendants: Two additional individuals, Shubhi Agarwal (wife of Sulav Agrawal) and Raj Bahadur Shah, have also been sued. While not insurance officials, they are charged as affiliated businessmen deeply involved in the organized syndicate.

3. Modus Operandi: How the Scam Was Executed

A surprise on-site inspection by the Nepal Insurance Authority (NIA) alongside a thorough CIB investigation exposed a highly coordinated "criminal gang" operating from a single centralized command:

• Breaching Investment Limits: Himalayan Reinsurance exceeded its legal stock market investment cap of 15%, sending massive funds through Bhrikuti Stock Broking (Broker No. 55) and failing to recover over Rs 2.73 billion from the broker.
• Micro-Insurance Misappropriation: Nepal Micro Insurance invested 31.86% of its funds into the stock market—blatantly violating its strict 10% limit—and left Rs 161.7 million unrecovered with Broker No. 55.
• Market Manipulation & Insider Trading: The diverted public funds were funneled into the personal names of mastermind Deepak Bhatt, Sulav Agrawal, and his wife Shubhi Agarwal. They used these funds to manipulate stock prices via cornering and insider trading.
• The Corporate Hub: Investigators uncovered digital evidence proving that illegal Trade Management System (TMS) transactions were actively operated using computers and internet networks located inside the corporate offices of Sauraya Cement (owned by Sulav Agrawal) and Jagdamba Steels (chaired by Shahil Agrawal).
• Regulatory Collusion: Former NIA Chairmen Sharad Ojha and Madan Dahal are accused of aiding and abetting the crime by unlawfully expediting and approving proposals that directly violated investment directives.

4. Legal Violations & Demanded Punishments

The District Government Attorney's Office has pressed for the maximum allowable penalties across multiple laws:

Insurance Act, 2079 (Section 140 & 141)

• The Offense: Serious financial misappropriation and embezzlement of insurance funds for personal gain.
• Sought Penalty: Forfeiture and confiscation of the entire misappropriated amount. Since the embezzlement exceeds Rs 10 million (totaling over Rs 3.5 billion), the main culprits face 3 to 5 years of imprisonment alongside an equal fine of over Rs 3.5 billion.
• Life Imprisonment: The prosecution has demanded life imprisonment for the main accused, Sulav Agrawal, under Section 44 of the Criminal Code, 2074 BS.
• Aiders & Abettors: Former regulators face half the sentence of the main culprits (1.5 to 2.5 years in prison plus half the fines) under Section 141(4).

Securities Act, 2063 BS

• The defendants are charged under Sections 94, 95, 96, and 98 for creating false transactions, inducing artificial price fluctuations, influencing the stock market, and executing fraudulent trading through Broker No. 55.

Money Laundering Prevention Act, 2064

• Beyond insurance fraud, the accused face a parallel money laundering trial in the Special Court, carrying a staggering claim of over Rs 22.39 billion, which could yield further multi-year prison sentences and massive financial penalties.