OAG’s findings also tally with the ACC’s review of the case
The Anti Corruption Commission (ACC) will not be investigating the Opposition Leader’s (OL)complaint to the ACC made in early January 2018 alleging a fake Rural Enterprise Development Corporation Limited (REDCL) office run by PDP coordinators which swindled people of money taken with the promise of getting loans from REDCL.
An ACC official said, “We have made our decision on this case long ago. During the process of information enrichment on the same case last year we found that there was no merit in the allegation that a fake REDCL office had been created.”
The Bhutanese has been able to access the original ACC enquiry into an original complaint made in 2017 and also the reasons for why they dropped the case then which ACC still stands by today.
In early 2017 a complaint was sent to the ACC on the similar lines made by the (OL) to the ACC in January 2018.
The then 2017 complaint alleged that the PDP MP Novin Darlami to gain ‘political mileage’ had deputed a person to be disguised as an REDCL official in Damphu, Tsirang. The complaint alleged that a REDCL branch office had been opened in Damphu and this office started distributing loan application forms to the people in Dagana and Tsirang Dzongkhags for Nu 300 each.
It said that it is also suspected that additional fees were charged for filling up the form. It said that thousands of forms had been distributed and that some people had to make numerous visits to the same office.
The then complaint to the ACC then also alleged that when cross checking the information with the REDCL office in Thimphu there was no such REDCL office in Thimphu.
The complaint then alleged that the so called REDCL office was housed and operating from one of the flats with a signboard of REDCL.
The 2017 complaint mirroring the 2018 complaint by the OL said the case was ‘serious politically motivated corruption.’
The ACC based on this 2017 complaint decided to do an ‘information enrichment’ exercise which is an information gathering process they do for most cases to see if the complaint merits an investigation or not.
However, after the information enrichment exercise the ACC did not find any documentary or circumstantial evidence to implicate the alleged MP or conduct any further investigation.
The Commission also noted that REDCL itself had also investigated the same matter and found it baseless.
The ACC in its then findings said that Gopal Waiba Lama from Dagana Dzongkhag initiated a process to get interested households in Dagana and Tsirang to register for the formation of an agricultural cooperative formation. This was after consultation with the Department of Agricultural Marketing and Cooperatives (DAMC) under the Ministry of Agriculture. It said the motive to form the cooperative was to help famers get loans through the Cooperative.
The DAMC in turn advised Mr. Lama to follow the procedures of registration of Cooperatives as given in the Cooperatives Rules and Regulations which requires that to form any new cooperative it must go through and get approvals from the Gewog and Dzongkhag and then to the DAMC.
In Tsirang the registration drive was coordinated by R.D Subba a contractor who provided working space for the registration. The actual work for registration was done by a team of three receiving 407 applications.
The ACC report says that the application fee of Nu 300 per applicant was collected to meet incidental costs and clear record was also maintained since this would be accounted.
The ACC found that a scribbled hand written signage, REDCL on the front door was the doing of some clients with the intention of helping other clients find the office.
It says the intention of the promoters of the cooperative, ‘Integrated Farming and Food Processing Project’ was to seek loan from REDCL as a cooperative once it was established as a Cooperative.
It said that there is no corroborating circumstances or evidences to implicate the MP or the REDCL.
Based on the ACC’s above findings it informed the Ministry of Agriculture and Forest on 4th May of the collection of Nu 300 per head and asked them to confirm the permissibility of such collection and to take necessary action and submit an action taken report to the ACC.
The Ministry in a letter on 15th May to the ACC said that Gopal Waiba approached the DAMC to consult on the formation of Cooperatives in Tsirang and Dagana.
The DAMC asked him to follow procedure and was given a copy of the registration guidelines.
In January 2017 he submitted a business plan to establish an Integrated Agro Food Park Project and Farmer’s Cooperative Bank to the Agriculture Minister.
This was forwarded to the Royal Monetary Authority (RMA) since the authority to issue banking licenses is vested with them. The RMA replied saying that they did not have a legal framework for the issuance of license for a Cooperative Bank.
The DAMC forwarded the proposal to the Bhutan Development Bank Limited (BDBL) for their views and seeking possible funding under the revolving fund. The BDBL in turn said this cannot be funded since the Revolving Fund was meant for small and cottage industries only.
Accordingly, Mr. Lama was advised to downsize his proposal in terms of value or alternatively apply for larger commercial loans. He was again advised to downsize the proposal following his presentation to the Department of Industry, Department of Livestock and Department of Agriculture, Department of Forest and Park Services, Department of Human Resources and BDBL.
The MoAF reply to ACC said that the Cooperatives Act does not specify the amount for membership fees but it states that membership fees shall be collected during the general assembly which has not taken place in both the Dzongkhags.
It says the rules do not require prior information to be given to the government for formation of cooperatives and that since the matter was of a non-registered cooperative, the MoAF or DAMC had no authority to take administrative or legal action.
The ACC report said that the promoters at the time were optimistic about their proposal to form a cooperative coming through and therefore has maintained a proper record of the applications including the collection of Nu 300 per person.
The ACC said that based on the above findings, the complaint did not merit any further investigation and therefore the Commission decided to drop the complaint.
So though the OL in early January 2018 filed a complaint to the ACC on the same case, the ACC after looking at the complaint found it to be the same allegations made to it in the complaint last year which it had looked into and dropped after finding no merit in the case.
Therefore, the ACC has decided to stick to its stand of 2017 which is that there is no merit in the case brought forward by the OL as it is the same of 2017.
After the OL in January 2018 had complained to the ACC the PM had asked the Office of the Attorney General (OAG) to investigate the case and prosecute any person legally if there was any wrong doing.
The OAG team comprising of the Attorney General and two Division Chiefs, visited Tsirang Dzongkhag from 15th to 19th of January 2018 and met 227 complainants in eleven Gewogs. The team also met the two promoters and the two serving National Assembly MPs of Tsirang Dzongkhag.
The OAG’s overall findings were similar to that of the ACC. It found that the two promoters, while being known as PDP coordinators as alleged by the OL, had intended to form Cooperatives for farmer in Tsirang and then through these cooperatives assist the farmers to get the loans.
Mr. Gopal Lama employed two ladies, Tulsa Chettri Bista and Damberi Kharka, on a monthly salary of Nu.7500, to assist applicants in filling up the forms and to collect fees. Tshewang Rinzin and Dawa Tamang from Tsirang were asked by Mr. Gopal to oversee the works on voluntary basis.
The application Form with approximately 23 pages was titled as “Integrated Farming & Food Processing Project under the Tsirang/Dagana Enterprise” and was in a project appraisal format designed by Mr. Gopal.
The two promoters posted in print on the office door, “Integrated Farming & Food Processing Project.” Many interested applicants started visiting the office and, at certain point of time, someone scribbled the word “RECDL” on the same post.
The majority of the complainants concur that the office was known to be PDP office and the acronym “REDCL” was scribbled on the posted note to indicate the source of loan to be availed. At that point of time, BOIC was more well-known than the newly incorporated REDCL, which had not yet opened its branch offices in Dzongkhags.
The complainants confirmed that the promoters or their workers did not tell them that the space where they had paid for the forms and filled them up was REDCL branch office and they all knew it as PDP office. Hence the OAG said that the allegation of opening fake REDCL office and committing impersonation is without credible basis. The same fact is confirmed by both REDCL and ACC report.
The OAG said that all applicants understood that the fees they paid were meant for the cost of the Form and to meet other incidental expenses. The fee collected was applied accordingly.
Thus, there was no element of deceptive practice in the chain of those factual events. The ACC report confirmed the same said the OAG report.
After the Cooperative proposal did not work out in Thimphu with RMA, MoAF and BDBL shooting it down the promoters according to the OAG evaded from responding to the repeated calls of the applicants and the office remained locked with no one to answer queries of the applicants.
It was over a year since the forms were taken, yet the applicants neither got loan nor explanation as to why things got held up till now which made the applicants take up the matter with various authorities.
While many applicants wish to get refund of the fees they paid, along with expenses incurred in the process, some don’t expect the fees to be refunded but would like their forms and other documents to be returned through Gewog office as they fear of it being misused by others.
The OAG said that the process of forming and registering cooperatives under the Cooperatives Act is vaguely understood by both the promoters and the applicants. The understanding on the purpose of group formation varied from one person to other. Hence, some applicants were fully aware that they were supposed to establish cooperatives for availing higher amount of loan while others felt that the group formation was intended to directly avail loans from REDCL and secure repayment.
The fee collection record maintained by the promoters shows that, although majority of the applicants paid Nu.300, some applicants paid Nu. 200 or Nu.100 while some are still noted as dues. The applicants confirm that the fees were paid as cost of the form and other incidental expenses. The payment of fees and travels were made voluntarily by the applicants. Hence, it constitutes a civil agreement between the promoters and the applicants upon payment of fee for their services.
Unlike other applicants, about 15 applicants from Dunglagang Gewog were made to pay additional Nu. 500 each as cost of “group cards” (may be to mean cooperative certificate). This fact was not known to the two promoters as they were hardly in the office and the fees were collected and records were maintained by the two ladies. The fee collected could not cover the monthly salary of the two ladies as few months’ salaries were noted as dues in their favor.
The OAG report said that no criminal offence was found to have been committed by the two promoters as there was no misappropriation of property as required under Section 265 of the Penal Code, particularly as the fees have been paid as application fees and to meet incidental expenses.
The legal vetting found no element of “commercial bribery,” “embezzlement”, “impersonation,” “collusion with the government agencies” or “swindling people” as alleged for the irrefutable reason that any person or party worker has equal opportunity and freedom to undertake the same venture as that of any person who has the freedom to avail such services without discrimination and without breaching the laws.
However, the two promoters, Mr. Gopal Lama and Mr. R.D. Subba, are found to have rendered their services to the applicants (clients) without trade license as required under Rule 1 of the RREOI & CV 1995. Hence, the report says that the Department of Trade (DoT) is obliged to direct the two promoters to pay a fine as stipulated for infracting Rule 1 of the RREOI & CV 1995, requires promoters to return safely the forms and other enclosed documents to each applican through respective Gewog Administrations and advises promoters to refund the fees collected to respective applicants, if the applicants so demand.
The OAG said if the promoters do not refund fees to the applicants as advised by the DoT, the aggrieved applicants may elect to file civil suit for recovery of the fees paid and or any other claims they may succeed under the Contract Act 2013.
The OAG says, such civil remedies can only be sought, through court, by the applicants themselves and not the State, as their individual civil rights and interests have been directly affected by the terms of their civil agreement with the promoters.
The vetting team of OAG also found no material evidence to construe involvement of the two serving National Assembly MPs from Tsirang Dzongkhag in the above alleged activities and the same was confirmed by the earlier ACC report.