Kathmandu, Nepal

Rabi Lamichhane, former deputy prime minister and home minister of Nepal, was arrested on Friday (Oct 18) by the Central Investigation Bureau (CIB) on charges of organised crime and misappropriation of cooperative funds. Lamichhane, the chairman of the opposition Rastriya Swatantra Party (RSP), was taken into custody outside his party office in Kathmandu.

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Background of the case

Cooperative fraud allegations

The arrest stems from a cooperative fraud case being investigated by the Kaski District Court. The court issued an arrest warrant against Lamichhane, accusing him of embezzling funds from cooperatives that were injected into Gorkha Media, where he was a managing director.

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Substantial evidence

According to the police, witness testimonies and other evidence gathered under Section 9(3) of the Civil Code of Criminal Procedure (2074) support the charges of embezzlement and organised crime.

Lamichhane's defence

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Political conspiracy

Addressing his supporters, Lamichhane claimed the charges were part of a political vendetta orchestrated by the coalition under Prime Minister K P Sharma Oli. He stated that the new alliance was plotting against him to stay in power.

"If I had made compromises like them, we would not have faced this problem. I can understand the compelling situation of the party, I received the information about an agreement signed on the day when the coalition changed that, Rabi (Lamichhane) will be sent to jail very soon. I am not worried about anything, I have got enough as a person, the expectation and the trust which is being attacked, we will face it, I am ready to face all the legal consequences- would respect the legislative procedures but would call on everyone to fight against this political prejudice.”

Social media criticism

After his arrest, Lamichhane took to social media to express his frustration, accusing the government of hypocrisy. He alleged that corrupt leaders were being protected while he, an ordinary citizen, faced baseless accusations.

"Your wristwatch is worth millions, while I wear handcuffs. You serve intermediaries and wear expensive glasses and shoes gifted by smugglers, while I carry the burden of accusations. The government has died, and we are in mourning. In your celebration of power, I commit to fully supporting the law and ensuring justice is served. Your actions will lead the country to ruin, but we will bring about change. The people will act, and soon, they will make their voices heard."

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Details of the cooperative scam

Parliamentary investigation

A parliamentary special inquiry committee formed in May 2024 had earlier investigated Lamichhane's involvement in the cooperative scam. The committee's report, tabled in parliament, concluded that millions of rupees from cooperatives like Suryadarshan and Supreme were funnelled into Gorkha Media using forged documents.

Embezzlement findings

The report named Lamichhane, along with GB Rai, Kumar Ramtel, and Chhabi Lal Joshi, as key players in the misappropriation of cooperative funds. The investigation revealed that Lamichhane had operated joint accounts and issued checks worth millions, confirming his involvement.

Cooperative origins

Funds from various cooperatives—Suryadarshan (Pokhara), Supreme (Butwal), Swarnalaxmi (Kathmandu), Sahara Chitwan (Chitwan), and Sanopaila (Birgunj)—were invested in Gorkha Media, violating cooperative laws. The failure of Galaxy 4K Television, a subsidiary of Gorkha Media, to pay salaries to its staff led to its closure in 2023.

Political history

Rise to politics

Lamichhane entered politics in 2022, founding the Rastriya Swatantra Party and winning a seat in parliament. Prior to his political career, he was the managing director of Gorkha Media.

Past controversies

In January 2023, the Supreme Court annulled Lamichhane's parliamentary membership, citing issues with his citizenship. This forced him to resign from his positions as Deputy prime minister and home minister.

Ongoing legal process

Wider implications

Alongside Lamichhane, the Kaski District Court has issued arrest warrants for 13 other individuals involved in the cooperative scam. A parliamentary committee had earlier interrogated Lamichhane for over 10 hours, during which he denied knowledge of the fraudulent transfers made to Gorkha Media.

Next steps

Following the endorsement of the parliamentary report, House Speaker Devraj Ghimire directed the government to implement its recommendations. Legal action is expected against all individuals involved in the fraud.

Lamichhane has pledged to cooperate with legal proceedings while rallying his supporters to challenge the government’s actions. His arrest has sparked political tensions, with accusations of power manipulation and growing dissatisfaction among his party's supporters.

Opposition parties' reaction

Janmat Party chair CK Raut has called the arrest of Lamichhane, an act of political vendetta.

“I can only describe the current arrest of Rabi, the chairman of a new national party with 21 seats, as an act of political vendetta and repression. This action undermines a promising future and attempts to thwart the golden prospects of the next generation at its inception. This arrest is a frame-up by the state,” Raut said in a Facebook post.