Why was Guna Airlines Operator Rajendra Shakya Arrested in Prabhu Money Transfer Embezzlement Case?

Police investigating the alleged embezzlement of Rs 1 billion from Prabhu Money Transfer arrested Rajendra Shakya, operator of Guna Airlines, on Wednesday.

Shakya, who is also the chairman of the Guna Group of Companies, was taken into custody after investigators found that Prabhu Bank issued millions of rupees in loans to Shakya’s companies in order to conceal irregularities in remittance fraud. The investigation is being carried out by the Central Investigation Bureau (CIB).

CIB Spokesperson Shiva Kumar Shrestha said loans were extended to Shakya’s companies to settle disputes between Prabhu Money Transfer and Prabhu Management. “We have obtained evidence that loans from the bank were provided to Shakya’s companies to manage the conflict between Prabhu Money Transfer and Prabhu Management. Therefore, he has been arrested for further investigation,” Shrestha said.

According to the CIB, the loans issued in the names of Shakya’s companies were misused to adjust transactions between Prabhu Management and Prabhu Bank. Police are also probing the suspected involvement of fake borrowers. Shakya is a former founding chairman of Kist Bank, which later merged into Prabhu Bank.

Shakya has been arrested under the Banking Offence and Punishment Act, 2008. The CIB said it obtained an arrest warrant from the Patan High Court. As the investigation is ongoing, police have not disclosed the exact amount misused under each borrower’s name.

Sources at Nepal Rastra Bank said that loans of around Rs 1 billion were misused from Prabhu Bank to settle disputes involving Prabhu Money Transfer and Prabhu Management. Police are continuing investigations by tracking down other suspicious borrowers.

Earlier, Prabhu Money Transfer Chairperson Kusum Lama had filed a complaint against Prabhu Management Chairman Devi Prakash Bhattachan, accusing him of fraud, criminal breach of trust, illegal gains and violations of the Nepal Rastra Bank Act.

The CIB had earlier arrested Bhattachan, a former chairman of Prabhu Bank, but released him on bail following a request from the government attorney citing health reasons.

As the investigation progressed, the CIB also arrested Prabhu Bank’s Chief Executive Officer Ashok Sherchan, Assistant CEO Maniram Pokhrel and Chief Risk Officer Rivas Shrestha last Sunday. Police said preliminary analysis by expert teams indicates that the bank suffered losses due to transactions carried out in violation of Nepal Rastra Bank directives and existing laws.

Who is Rajendra Shakya?

Rajendra Shakya is the chairman of Guna Group of Industries. He began his business career in 1984 as the chairman of Guna Jewellers and currently leads several companies under the Guna Group, including Guna Enterprise, Guna Cinema, Guna Cooperative, Guna Jewellers, Guna Airlines, an engineering college, The Massif Hotel and Kist Medical College.