• NRB’s letter shows that the funds were simply transferred from Sumargi’s foreign account to the account here

Kathmandu, May 28

The Supreme Court today ordered the government to investigate foreign investment of $7.5 million that entered Nepal for Muktishree Cement promoted by Ajeya Raj Sumargi.

A bench of Chief Justice Cholendra Shumsher Rana and Justice Bam Kumar Shrestha directed the government to verify the legality of the investment by November-end.

“Take appropriate decision about the source of the funds in the bank account of the applicant (Sumargi), based on whether it violates the Anti-money Laundering Act or not,” the SC verdict reads.

The legality of funds is questionable, as Nepal Rastra Bank’s letter shows that the funds were simply transferred from the applicant’s foreign account to the account here.

The SC has also quashed Sumargi’s petition seeking release of the frozen amount and pointed out that the amount was frozen as per a previous SC order.

The apex court had issued an order to freeze the said amount by quashing its previous verdict that declared the funds were legitimate on December 25, which had paved the way for Muktishree Cement to withdraw $7.5 million. On December 25, a single bench headed by Justice Deepak Raj Joshee had issued an interim order instructing the central bank to allow Sumargi and his company to withdraw the money.

However, a joint bench of CJ Rana and Justice Ananda Mohan Bhattarai on January 10  revoked the interim order issued by Justice Joshee and ordered that the funds be put back in the frozen bank account even if the money had already been withdrawn.

While Sumargi had withdrawn $7.5 million after Joshee’s interim order, he did not redeposit the sum after CJ Rana and Justice Bhattarai revoked the interim order.

NRB had frozen $7.5 million out of $45 million that Muktishree Cement had received in foreign investment. Sumargi had moved the apex court demanding that the frozen amount be released.

Joshee had issued the interim order allowing Sumargi to withdraw the amount without even hearing the arguments of NRB.

Prior to the December 25 verdict, the central bank had barred Muktishree Cement from withdrawing $7.5 million as the company had failed to submit the required documents.