iReport — http://ireport.cnn.com/docs/DOC-605102
The biggest fiscal or ‘white’ crime in Nepal’s history After resigning from the position of Finance Secretary, Rameshwor Khanal wrote a brief note on his Facebook account – “I came across people with greed for power and money each day for the last eight years.” So who are those people who are only running after money and power? We have obtained a confidential list of large corporate houses involved in fake Value Added Tax (VAT) bills scam for their greed of money and then lobbying for power to clean up their mess through political channels. The list of those involved in the biggest fiscal or ‘white’ crime in Nepal’s history so far includes even the earliest Nepalese conglomerate that also claims itself as the first multinational of the country. The companies of two parliamentarians representing from the quota of businessmen and industrialists in the Constituent Assembly to write an inclusive constitution for the newest republic are also enmeshed in the fraud. Read further below to find out who they are. The Frauds Thirty-one out of fifty-two companies under investigation of Inland Revenue Department (IRD) have been found to evade tax using fake VAT bills. Among those, twenty-four companies had evaded 2.7 billion Nepalese Rupees in VAT and income tax through transactions in fake bills while they had taken back VAT amount of 890 million Nepalese Rupees by submitting fraudulent certification of payments. The VAT scam involves large conglomerates such as Chaudhary Group, Golchha Organisation, Vishal Group, Shanker Group, Varun Developers, all owned by trading community from India called Marwaris, plus Bhatbhateni Supermarket of a native Nepalese and even the Chinese contractor of Chameliya Hydroelectricity Project. These include the firms of two sitting parliamentarians of Nepal’s Constituent Assembly – Binod Chaudhary, Chairperson of Chaudhary Group and Diwakar Golchha of Golchha Organisation. UML, the third largest political party had nominated Chaudhary and Diwakar Golchha was nominated by Nepali Congress, the second largest party in the Assembly. Shanker Group Among the 31 firms investigated under the scam, most fake bills have been found in the name of Jagadamba Steels amounting to 800 million Nepalese Rupees, according to the source in the Inland Revenue Department (IRD). The fair payment of VAT would have only been 38% of total amount; however, after investigation, the tax amount has been fixed to 600 million Nepalese Rupees. Tax evasion implies 13% VAT, 25% income tax and fine of the same amount plus interest at 15% per annum payable to the government that makes 75% of the 800 million Nepalese Rupees i.e. 600 million Nepalese Rupees, informed the source. President of the group, Shankar Lal Golyan who came to Nepal without a penny from India 40 years ago now owns 18 industries. Jagadamda Steels is the largest company of the group. Shanker Group’s annual transactions come around 26 billion Nepalese Rupees, claims Golyan in his website. After investigation of 52 firms under the scam, the second list of tax defaulters of 480 firms also include other companies of the group. Pawan Kumar Golyan of the same group is also the chairperson of NMB Bank, Nepal’s first commercial bank. Chaudhary Group Under this group, three companies headed by the group’s President Binod Chaudhary and one headed by Arun Chaudhary are also involved in the scam. Fake VAT bills worth 60 million Nepalese Rupees have been found from CG Impex and CG Electronics of the group. CG Foods of the same group is also involved in the fraud. It is one of the five companies in the final list in course of investigation that has evaded tens of millions Nepalese Rupees through fake bills, informed the source in the IRD. Chaudhary Group, that recently grabbed international headlines with its decision to open dozens of hotels outside Nepal, sells LG and CG electronic appliances in Nepal through GC Impex and CG Electronics. CG Foods produces Wai Wai Instant Noodles in Nepal and India, with collaboration of Thai Foods Industries, which has gained popularity in Asia and Europe. Fake VAT bills worth 160 million Nepalese Rupees have also been found from Arun Intercontinental of Arun Chaudhary, lawmaker Chaudhary’s sibling. The IRD had investigated eight wholesale traders of automobiles that evaded 200 million Nepalese Rupees in VAT among them. Arun Intercontinental is the largest defaulter, stated the source in the IRD. Golchha Organisation The IRD investigation also found fake VAT bills amounting 60 million Nepalese Rupees of Him Electronics under Golchha Organisation headed by parliamentarian Diwakar Golchha. Him Electronics itself is directed by rising ‘major entrepreneur’ Shekhar Golchha. Last year, another firm owned by the group, Neoteric Nepal, distributor of information technology, communications and entertainment products such as Nokia, HP and the likes, was also found guilty in previous IRD investigation. The company had come under scanner after it issued VAT bills in advance dates. Since then, the IRD had speculated of transactions in fake VAT bills from the company. However, the biggest tax investigation had been started after fake VAT bills of more than 200 companies were found in a raid of a firm in southeast Kathmandu. Vishal Group Not so popular but another large conglomerate, Vishal Group’s United Distributors is also involved in the VAT fraud. Listed under multinational companies in the course of the IRD investigation, the company has evaded 100 million Nepalese Rupees through fake bills. United Distributors deals in cosmetic and daily consumer goods imported from India and other countries. With strong political access to the level of Finance Minister, this group has investments in banks and other financial institution, insurance companies and trading houses. The chairperson of Vishal Group JP Agrawal also chairs the board of NIC Bank while the group’s vice-chairs TR Agrawal and Nirmal Agrawal are members of the bank’s board too. NIC Bank is the first bank in Nepal to be provided a line of credit by International Finance Corporation (IFC), an arm of World Bank Group under its Global Trade Finance Program. In addition, another deputy of Vishal Group Trilok Chandra Agrawal is the chairperson of newly formed Bank of Asia and Anuj Agrawal is board member of the bank. According to the source, the second list of 480 companies for investigation of fake VAT bills fraud also includes other firms of the group. Bhatbhateni Supermarket Owned by Min Bahadur Gurung, who has recently imported a Mercedes Benz car through ‘air cargo’ spending tens of millions Nepalese Rupees, one of the biggest supermarkets of Kathmandu is also involved in the VAT fraud. The investigation found fake bills worth 80 million Nepalese Rupees from the Bhatbhateni Supermarket that runs two super stores in Kathmandu. Bhatbhateni Supermarket is one of the five companies currently under investigation that are yet to be confirmed for their tax evasion amount, informed the source. It is also liable to pay 75% of the total worth of fake VAT bills, stated the source. Most companies involved in the scam are owned by Marwaris, the trading community from India, it is a surprise how Bhatbhateni Supermarket also got enmeshed in the fraud, one of the IRD officials noted. Varun Developers Another tax defaulter is Varun Developers owned by Indian investor Ravi Jajpuria’s company RJ Corp that rose to fame last year with introduction of international fast food chain KFC and Pizza Hut in Kathmandu. Besides KFC and Pizza Hut, the parent company has also invested in Varun Beverages, the producer of popular drink Pepsi in Nepal. Varun Developers sells super-luxurious condominiums named Park View Horizons it built in northeast Kathmandu. The company that has put up for sale a single bungalow for 11.9 million to 25.3 million Nepalese Rupees has been found to evade 150 million Nepalese Rupees through fake VAT bills. The tax payable for the company has been decided to be more than 110 million Nepalese Rupees. Chameliya Hydropower China Gezhouba (Group) Corporation (CGGC), the Chinese contractor for civil construction of Chameliya Hydropower Station in Nepal is also enmeshed in the VAT fraud. The CGGC had bought fake bills to increase its variation that amounts to 600 million Nepalese Rupees, stated the source for which the VAT payment of the payment could not be found in books ....... -- FOSS Nepal mailing list: [email protected] http://groups.google.com/group/foss-nepal To unsubscribe, e-mail: [email protected] Mailing List Guidelines: http://wiki.fossnepal.org/index.php?title=Mailing_List_Guidelines Community website: http://www.fossnepal.org/
