BIJAY DAMASE

KATHMANDU: Sixty kilograms of gold hidden in the 'brake shoes' meant for motorcycles was recovered outside the Tribhuvan International Airport last July. A police investigation has since revealed that the same gang smuggled gold worth approximately Rs 32 billion.

On July 18 of the previous year, the Revenue Investigation Department seized 60 kg and 716 grams of gold concealed in motorcycle brake shoes. Initially, the department conducted the investigation, but it was later handed over to the Central Investigation Bureau (CIB) of Nepal Police.

On September 17, 2023, the Kathmandu District Public Prosecutor's Office filed a case against 29 individuals, including Chinese nationals, in the Kathmandu District Court. The police investigation uncovered that a group of Chinese smugglers, connected with leaders such as former Speaker Krishna Bahadur Mahara, orchestrated the smuggling. It was found that Daoxin Wang, the "mastermind" of this smuggling operation, had several telephone contacts with Mahara, who is also the vice-chairman of the CPN (Maoist Center). Although Mahara was questioned, he was not named as a defendant. Mahara's son Rahul and former Vice President Nanda Bahadur Pun's son Dipesh were also questioned.

Despite filing a case against 29 individuals last year, the police continued their investigation, uncovering further smuggling activities. It was found that gold worth Rs 31.822 billion had been smuggled through five fake companies, with gold hidden in electrical equipment and brakes. The investigation revealed that 2,831 kg 89 grams of gold were hidden in electrical goods and 362 kg 778 grams in brakes. Twenty more individuals were arrested during this investigation.

The volume of gold smuggled by this group amounts to almost the annual gold import through formal channels. In the last fiscal year (FY) 2079/80, Nepal imported gold worth Rs 39.93 billion through official channels. In the current year, gold worth Rs 23.65 billion was imported in the first 11 months, totaling 2,652 tons. This shows that the smuggling of gold has had significant impact on foreign currency reserves.

The police discovered that gold was smuggled through Bhujel Electric Suppliers Pvt Ltd, Hwada Electric Suppliers Pvt Ltd, Chungak Electric Suppliers Pvt Ltd, Dolakha Electric Suppliers Pvt Ltd, and Ready Trade Pvt Ltd. Ready Trade Pvt Ltd was implicated when the Revenue Investigation Department seized gold outside Tribhuvan International Airport.

Additionally, two payment gateways, Paywell Nepal Pvt Ltd and Easy Payment Service Pvt Ltd, were involved in illegal payments for the smuggled gold, leading to the arrest of eight individuals, including board members and employees.

During the first phase of the investigation, the police found that 362 kg 778 grams of gold hidden in the brake shoes were smuggled into Nepal. The CIB filed a charge sheet against 29 individuals on September 17, 2023, demanding Rs 3.50 billion from them. Out of the 29 people arrested, 24 are in pre-trial detention. In the second phase, 46 individuals were made defendants, with 20 arrested and 26 still absconding.

The CIB arrested several key figures involved in the smuggling and illegal payment processes, including Siddanath Ashok Gaikwad, Dheeraj Dinesh Bhoite, Prashant Ganesh Baj Balkar, Chinese nationals Genja Jhachi and Sherap Sonam Gurung, Raju Palase, Kancha Lama, Manojraj Shrestha, Rupak Bhandari, Baijnath Brahmadatta Goyal, and Surendraman Shrestha. Paywell's chairman Bhimprasad Timalsina and several employees were also arrested.

Daoxin Wang's group set up seven companies, smuggling gold through five of them. Fake companies like Bhujel Electric Suppliers Pvt Ltd and Hwada Electric Suppliers Pvt Ltd were part of Wang's scheme. Gold was smelted at factories operated by Yao Pucheng's group in Tokha and Zhong Jingchuan's group in Lazimpat, with further operations at Sankata Mandir and Tangal in Patan.

The police found images of the gold hidden in the brake shoes on Siddanath Ashok Gaikwad's mobile phone, along with conversations between key figures in the smuggling operation. Additionally, images of the gold were found on the phone of a Nepalese Gamba Sherpa, who later committed suicide.

Electronic Wallet Used for Illegal Payments

Investigations revealed that electronic wallets, promoted by Nepal Rastra Bank to reduce cash usage, were used for illegal transactions. The CIB's investigation into gold smuggling found that Paywell and Easy Pay Wallet conducted illegal transactions worth over Rs 123 billion.

From April 25, 2023, to June 3, 2024, Paywell's wallet received e-money credits worth Rs 86 billion, with Rs 61.5 billion deposited through vouchers instead of bank transfers. Similarly, Easy Pay Wallet loaded e-money worth Rs 36.94 billion, with Rs 19.46 billion uploaded through vouchers. Following the investigation, Nepal Rastra Bank froze the accounts of both wallet companies on June 3.

Nepal Rastra Bank has set transaction limits of Rs 200,000 per day and Rs 1 million per month for wallets, with different limits for transactions from one wallet to another. Wallet companies can also partner with remittance companies to send remittances, with no applicable limits. However, both Paywell and Easy Pay used unauthorized methods for remittance transactions and engaged in Hundi transactions.

The CIB investigation found that the wallet companies conducted cash transactions through agents without Nepal Rastra Bank's approval, used bank vouchers as payment instruments, and issued more e-money than what was in the bank's settlement account. The companies also submitted inaccurate daily and monthly transaction details to the Nepal Rastra Bank’s Payment System Department.