A parliamentary committee tasked with investigating the misappropriation of public savings in cooperatives has recommended legal action against former Deputy Prime Minister and Home Minister Ravi Lamichhane, who is also the chairman of the Rastriya Swatantra Party (RSP), for his alleged involvement in the misuse of cooperative funds.

According to the committee, while Gitendrababu (GB) Rai, chairman of a cooperative and media outlet, is seen as the mastermind behind transferring cooperative funds to Gorkha Media, Lamichhane also bears responsibility due to his role as managing director of the media company.

The Parliamentary Probe Committee on Misuse of Cooperative Funds reported that Gorkha Media alone misused and embezzled Rs 85 million from various cooperatives. The report details that funds from multiple cooperatives were improperly transferred to Gorkha Media's accounts and directors Gitendrababu Rai, Chabilal Joshi, and member Kumar Ramtel, along with then-Managing Director Ravi Lamichhane were accountable for spending the amount. The committee recommended that the Government of Nepal take legal action against the individuals involved, as the company is liable for the misappropriated funds.

A parliamentary committee was formed on May 28 to investigate the issue after the Nepali Congress disrupted parliamentary proceedings, accusing Lamichhane—then serving as home minister—of misusing loans from cooperatives. However, during the investigation, a committee member revealed that no direct evidence was found linking Lamichhane to the alleged loan or embezzlement.

"We did not find that Ravi Lamichhane personally took a loan from the cooperative as claimed by some MPs," the member stated. "But since it was discovered that cooperative funds were transferred to a company where he served as managing director, he must be held accountable."

Lamichhane, who held a 15% stake in Gorkha Media Network, has maintained that Chairman Rai granted him 'sweat shares' based on goodwill. He claims to have returned those shares and left the company. The committee noted that the shares were traded on the basis of fake paperworks, recommending mandatory taxation and legal reforms for such transactions.

During the committee's inquiry, Lamichhane stated that he was not a member of any cooperative and did not facilitate the transfer of cooperative funds to Gorkha Media. Following the report's publication, he took responsibility for Gorkha Media's financial transactions, stating, "As the managing director, I signed on the company’s financial transactions. If I have erred under the prevailing law, I am ready to face the consequences."

After the committee found no direct evidence linking Lamichhane to taking loans from the cooperative, Lamichhane and his RSP colleagues claimed that the allegations of fraud were baseless.

Professor Doctor Gandhi Pandit, a corporate law expert, observed that the parliamentary committee could not prove Lamichhane’s direct involvement in cooperative fraud. "If any irregularities occurred within Gorkha Media Network, other investors can file complaints for action," Pandit explained. "However, under company law, the responsibility to repay debts does not fall on an individual, even if the person is a director."

According to the Cooperatives Act, cooperatives are prohibited from considering companies as members or investing loans and shares in private businesses. The investigation revealed that cooperative funds were invested in Gorkha Media Network, violating these legal provisions. Previous investigations have also pointed out that weak laws and oversight allow cooperative operators to misuse public savings by investing in real estate, businesses, and private ventures, putting public funds at risk.

The Parliamentary Probe Committee has recommended that the government take legal action against cooperatives like Image Savings and Loan Cooperative, Equal Savings and Loan Cooperative, Sumeru Savings and Loan Cooperative, and IME Cooperative, for misusing cooperative funds in violation of the law. After the committee chairman, Surya Thapa, submitted the report to the Federal Parliament on Monday, Speaker Devraj Ghimire directed the secretariat to forward it to the government for further action.

Speaking in the House of Representatives, Thapa revealed that fraudulent practices were rampant, with fake debtor records, forged annual general meeting minutes, and falsified audit reports being used to illegally divert cooperative savings into private companies.

"There is a serious problem of forgeries in cooperatives. Many practices are going against both legal standards and public trust," he stated. "We discovered that everything from annual general meetings, creditor lists, and audit reports to share allocations—and even marriages—had been falsified.”

The committee was mandated to investigate 29 cooperatives, including 20 declared problematic and nine others. Additionally, it addressed complaints received verbally and in writing from the public.