KATHMANDU: Some banks and companies in Nepal are allegedly involved in the transfer of money suspiciously obtained from supervisors, according to an investigation carried out by the Nepal Center for Investigative Journalism (CIJ) in conjunction with the International Consortium of Investigative Journalists (ICIJ) and BuzzFeed.
The investigative report released on Sunday shows the involvement of Nepalese companies and banks trying to cheat US sanctions on trade, especially in Iran and China.
Based on a top secret document prepared by the ‘Financial Crimes Enforcement Network’, a government body that monitors the financial transaction system in the US, the collective investigation report has been dubbed ‘FinCEN Files’.
According to ‘FinCEN Files’, between December 2006 and March 2017, 9 banks, 10 companies and several individuals in Nepal were found to have transacted (sent / received) suspicious funds on behalf of cross-border trade.
“This shows that some Nepalese business entities are linked to international smuggling of gold, antiques, bitumen and telecommunications equipment. Standard Chartered Bank, Prime Commercial Bank, Bank of Kathmandu, Nepal Investment Bank, Everest Bank, Mega Bank, Himalayan Bank, Apex Development Bank of Kaski and Nepal Bangladesh Bank are mentioned in the list of banks that are involved in the suspicious money transfer, “said the 25-page report based on the coverage of Nepal.
FinCEN Files showed the participation of 10 Nepalese companies that directly sent or received suspicious funds. According to the report, a suspicious amount of US $ 292.7 million has been traded through these banks and companies over the 11-year period.
The report has named Rauniyar Brothers & Company, SubhaSamriddhi Traders Pvt. Ltd., Shasta Trading Company, Setidevi Export Import Pvt. Ltd., LD International Pvt. Ltd., Felt and Yarn Pvt. Ltd., Woman’s Paper Crafts, Acme Money Transfer Service and Sunny Enterprises as the companies allegedly involved in suspicious cross-border transactions.
Among the companies, Rauniyar Brothers & Company, Shubha Shambridhi Traders, Private Limited, based in the Parsa district of Nepal, have allegedly conducted suspicious transactions through a Dubai-based company called ‘Kite International FZE’, whose main business is the import and export of petroleum products such as bitumen, motor oil for vehicles, lubricants and oil for rubber processing.
“Through these dubious Dubai-based companies, the Rauniyar family has traded and transferred suspicious money on behalf of the import and export of bitumen and petroleum products in Nepal. Rauniyar Brothers and Shubha Shambridhi Traders have repeatedly opened letters of credit ( LC) of Standard Chartered Bank of Kathmandu between September 28, 2010 and September 4, 2014. During this four-year period, these two companies have sent payments of US $ 71.4 million to different countries, including Dubai ”The report revealed.
Further adding, “FinCEN has pointed out sensitive facts about these companies. Rauniyar’s company brought the goods from Iran, a country where the United States has imposed a trade ban. However, the documents have been falsified to show that the goods were imported from Dubai. ”
During the investigation, Nepalese investigative journalists attempted to get a response from Kite by email, but received no response. But the team of investigative journalists found that ‘Kite International FZE’ stationed in Kenya, Zambia, Mozambique, Nepal and the United States have also launched a “new project for higher education in Nepal” through their website. But there is no official record of the project so claimed.
Narayanji Rauniyar, one of the directors of two companies, whose link has been established with Kite, said his two companies are currently closed. “There is no company now. Four or five years have passed since it was closed,” the report quoted by him said.
“Before we imported bitumen, but we no longer do it,” he added. FinCEN stated that his son, Prakash Kumar Rauniyar, was the brains behind the business. Narayanji said he was abroad and would give his phone number, but that did not happen. Both Rauniyar Brothers & Company, SubhaSamriddhi Traders Pvt. Ltd. are registered under the name Narayan JiRauniyar of Birgunj and his four sons: ShyamBabu, JyotiBabu, Prakash Kumar and Deep Kumar Babu.
Link between a Nepalese bank and ZTE
According to FinCEN, Zhongxing Telecommunication Equipment (ZTE) Corporation, China’s largest telecommunications service provider company, remitted US $ 213.3 million to other countries, including Nepal, from March 17, 2011 to March 1, 2017 .
ZTE had carried out the transaction through Beijing-based China Construction Bank. The US branch of China Construction Bank in New York had found the transaction amount to be suspicious.
In the duration of three years and four months from November 4, 2013 to February 27, 2017, it was found that ZTE had deposited some amount with the Nepal Investment Bank, according to ‘FinCEN’.
In the description, four separate amounts are found: $ 5,709.09, $ 5,244.76, $ 40,357.75 and $ 10 deposited by ZTE Corporation at the Nepal Investment Bank, Kathmandu.
According to FinCEN, citing various media outlets, the five-year investigation cited “various conspiracies” that ZTE created to evade US sanctions. The company “buys telecommunications equipment from the United States and illegally sells it to Iran as ZTE equipment.” According to FinCEN, ZTE exchanged suspicious funds in various countries to mislead regulators against US sanctions.
ZTE is one of the leading exporters of telecommunications equipment in Nepal. Shortly after the Gorkha earthquake of 2072 BS, ZTE was importing materials to build a tower for Ncell, a Nepal-based telecommunications company.
The purpose of the import was commercial, but its intention was to circumvent the customs duty, when it tried to bring in goods by sticking Red Cross stickers on imported goods. After it was discovered during customs inspection, ZTE had to pay Rs 10.1 million to release its goods.
“BijendraSuwal, Deputy Director General of the Investment Bank of Nepal, said that so-called suspicious documents should be sent for response. He said that the bank could not reveal the relationship between the bank and the client under the Banking and Financial Institutions Act, 2073 BS, “the report read.
“Due to the lack of adequate evidence, we are unable to release information about our clients due to privacy obligations,” Suwal is quoted in a report that the group of investigative journalists received in response by email.
There was no response from ZTE on the report.
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