In April 2011 the Royal Audit Authority (RAA) submitted an investigation report on the Bhutan Lottery case to the Prime Minister, however, more than a year later no action has been taken against the perpetrators of Bhutan’s biggest scam till date.
While officials at the RAA refrained from making any comments on the case the Anti-Corruption Commission (ACC) has also not followed-up with several corrupt and criminal practices of some Bhutanese lottery officials mentioned in the RAA report.
According to the ACC the agency did not have the jurisdiction to investigate the lottery scam in India as it would have to investigate the Indian Operations also.
An important source behind the lottery stories said, “This government has not taken further action on the lottery issue as it would embarrass the current Finance Minister Lyonpo Wangdi Norbu and the past Finance Minister Lyonpo Yeshey Zimba along with other senior figures close to this government.”
The Finance Ministry is the key parent agency of the Bhutan Lottery Directorate which was located in Phuentsholing.
The Prime Minister Lyonchhen Jigmi Y. Thinley in January 2011 had ordered for a special audit of the Bhutan lottery operations following a series stories carried by Business Bhutan detailing the multi-billion scam where Bhutan was losing billions in potential revenue every year along with its name getting tarnished with illegal practices.
The Prime Minister while he ordered an RAA probe had pledged that an ACC probe would be called for if there were elements of corruption found in the RAA report.
However, even though there were clear elements of corruption along with RAA recommendations of further investigation the Prime Minister did not forward the case for investigation to the ACC.
Citing a vague excuse of national interest the government stopped all further investigation of the Bhutan Lottery scam and in a controversial move closed down the lottery business in August 2011.
The special RAA report on the Bhutan lottery operations confirmed many of the media reports on the Bhutan Lottery scam.
The report confirmed irregularities in the operation of Bhutan Lottery which was worth Nu 263.6bn a year in 2007 alone, printing in illegal presses, billions in potential revenue lost by Bhutan, reduction of annual fee from 470 mn to 220 mn on false grounds, non printing of prize money, changing the lottery agreement illegally by the current government to favor Martin and other illegalities.
The report also pointed out cases of unauthorized payments to Bhutan lottery directorate staff, illegal transfer of company ownership, under-reporting of actual value of Bhutan lottery by lottery officials etc.
The report says that Bhutan’s earlier arrangement with Jayantilal of 4 % of the total turnover if applied on the current lottery business would have generated more revenue. This would mean that in 2007 when the turnover was Nu 263.6 bn Bhutan could have got Nu 10.544bn in revenue. This money would easily have solved Bhutan’s rupee crisis and more.
The RAA report confirmed that Martin had been skimming of billions every year in prize money of Bhutan lottery tickets in India by keeping the prize money for himself. The prize money which was Nu 4.4 bn in just three months of 2010 should have come to Bhutan as per the agreement signed with Martin.
The RAA found that in three of the CD accounts, huge deposits of cash coming to Nu 185.5 mn had been made in the accounts for minimum assured return, prize money, security deposit. These same accounts were also being used to make unauthorized payments to the staff of the lottery directorate.
The audit report was however not shared with anyone except the Prime Minister, Finance Minister and the Finance Secretary.
ACC was not provided with a copy and copies were denied to the National Council and opposition party among others.
RAA’s then recommendations included the termination of the existing agreement with Martin, organizational reforms of the directorate of lottery, ensuring proper conduct of lottery operations, studying the various option in managing Bhutan lottery like conducting market study, appointing multiple agents, printing of tickets in Bhutan, levying tax on lottery operations, further investigating some issues, collaborating with state governments and making sure that lottery agents deposit all security deposits, sales proceeds and submit accounts for unsold tickets.
However, despite a Royal Audit Authority report confirming several acts of illegality in the running of Bhutan lottery by the directorate of lottery, no action has been taken so far. The lottery director Yeshey Lhendup resigned only a couple of months before his retirement with full benefits.
A former senior official with the Office of the Attorney General (OAG) said, OAG never received any instructions and that “OAG cannot do anything unless it is charge sheeted by law enforcement agencies”.
While the current government has become silent on the issue, members of other political parties are concerned about the lottery scam and the lottery business.
The spokesperson of Druk Nyamrup Tshogpa (DNT), Dr Tandin Dorji said, “People who have been implicated should be brought to task and the law should take its course on that”
He said, “Closing down the lottery which is bringing a lot of revenue for the country should have gone through a longer consultation”. He added that the government’s decision was not as per the democratic process.
It was also one of RAA’s recommendations to continue the Bhutan lottery operations due to the huge market potential.
Dr Tandin added that the business should not have been closed just because of a few who were involved in the scam. “It should have gone through a better process; management and monitoring which can bring in millions of revenue”.
Opposition MP Damcho Dorji said there was no copy of the RAA report provided to him and is not aware of anything on the lottery case.
“Action should be taken against anyone involved but we don’t know for sure about who else are involved because the government wouldn’t share the report”, he added.
Damcho said, “It could be due to the involvement of influential individuals in the lottery scam from the government.”
Dasho Penjor Dorji of Druk Mitser Tshogpa (DMT) said “This is a very serious case and we need to also ask why the lottery was closed”.
He said the closure of lottery business has “deprived the country of millions of rupees” and the country needs to know why it was closed down.
Dasho Penjor said he has asked the same question to an ACC commissioner and is yet to hear from the official.
“Our party would like to revive the lottery business and we want to know if there something really wrong about the lottery that it cannot be started again”, he concluded.
Normally, the National Council (NC) reviews such cases of corruption along with the Public Accounts Committee (PAC) which is a joint parliamentary committee comprising of members from the NC and the National Assembly (NA).
However, PAC members said they have still not received any concrete information on the case and the RAA report was not shared with the house.
PAC chairperson NC member Pema Lhamo said, “so far we haven’t initiated any sort of review on that because we have not received any information as yet and we haven’t got a copy of it”.
PAC member NC Jigmi Rinzin said NC will be able to review the issue if the report is provided to the house.
Chairperson of NC’s economic affairs committee NC Rinzin Rinzin said “Not much legal action has been taken except for a few administrative decisions which are also not up to the mark”.
He said action should have been taken against the officials involved instead of closing the lottery operations.
Upon inquiring about the issue, with the Prime Minister’s office, The Bhutanese was directed to talk to officials in the Ministry of Finance who in turn were not available for comments.
Earlier the CBI in India had requested the Bhutan government through Interpol to talk to some Bhutanese lottery officials but no cooperation was provided on the issue by the government.