No action against Bhutanese officials involved in the multi-billion Bhutan lottery scam

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.

About Minjur Dorji

30 comments

  1. Now we can see how many fish are in the river bed as the river dries up. That is why democracy is better for society than any other form of government.
    All the ministers from the pre-democracy era, including jigme thinley are involved in massive corruption cases, what should the citizens do to them? Under whose watch were these ministers allowed such freedom to practice and apply corrupt practices? The exchanged the welfare of people for ther own self benefit. No wonder, Bhutan is still a backward country. We are a happily corrupted country.

    • It is the unmasking of corruptions before democracy not after. 

    • So according to you, the monarchy was terrible, is this what you are trying to convey.

      • The Monarch was and is benevolent and caring to his subjects as always. It was the machinery, the authorities with unquestionable powers who were corrupted then. They took advantages of the trust bestowed upon them I guess. 

        • Phunstho, sorry, my question was not directed to you, it was meant for kg above, as for our Kings, I am with you. But investigating cases from those days and throwing the muck around from a past time is certainly doing no good for the image of our monarchy.

  2. Tshering Gyelsten

    OMG, i can not even imagine, PM JIgme thinley, FM wangdue Norbu, yeshey zinmba are long time associates trusted subject of HM fourh drukgyalpo, were they doing these corruruption right under his nose? wow, what a people to be trusted? i can imagine why many decesions went faulty with this kind of people feeding wrong information to majesty. Can any ony constitute a committee to see how 1990 and ULFA bodo problem happen in country, there are some other big name will come . Every problem is started with the intentions of getting benifit, dago, C dorji , dawa tshering are oldies beificiaries….

    • Maybe Tenzing Lamsang needs to investigate what Tshering G has said, why stop at Gyelpozhing, dig even further.

  3. All the rich people in Bhutan are not born rich. 95% of rich people have accumulated the wealth within a span of 25-30 years in service (This include almost all ministers and other high profile civil servants and business men).

    SO the question here is how come these people are able to accumulate such massive wealth in 2-3 decades? I would like to ASK ACC to investigate and question these people and let us know the truth.

  4. They are waiting this long so that they can tamper with policies and evidences to remove valid information duhhhh!

  5. Truth_is_Buddha

    Stories of corruption and misuse of influence & power. one after another surfaces, and yet the govt stays silence and favours the wrong parties. How can a normal citizen sleep in peace knowing that we may be led by thiefs and cheats?

  6. Druk Wangyal, Druk Thugsey, Coronoation…..etc. ..etc….Medalist.

  7. The Only solution is that there should be new party, fresh and energetic, free from corruptions into power in 2013.
    The part in power should be able to drag all these corrupted people in to court and put behind bars, even to Jigme Thinley, yeshey Zimba, Wangdi Norbu and Jigme Tsheltrim if they are guilty. As for chang ugyen, since it is already proven that he has been in corrupt practice, he should be either given lice sentence or hang till death.
    Then, the next generation people can be at least 90% free from corruption.

  8. This paper is tempting to read sometimes but equally disgusting stories in each issue! I can neither ignore this paper nor not feel hopeless about the system, and am scared to be part of….

  9. Dear Readers i heard that bhutan lottery case is being closed after confirming that there is no corruption in it. But i am sure that there is somthing special in this case.Last time even Bhutan Observer paper has reported the officals who were died in accident might be not accident. The closing of office itself is great loss for the country as its one of the Top 10 Income generator and also one of the most important ruppee earner. If there is no scam or corruption in it there is no point of closing it as they have constructed a huge building to house the staffs and Office in the hear of Town. We dont have any body to object Governments decision even if they take wrong path to save them selves. What is the point of Having ACC,OAg and so on. What is the point of having NC who represents people in the Pirlament. We dont mind them going against govt.if our govt try to breach the law of our country. You all have right to remind them,correct them,and if not take them to the court we the people are here ready to hold strike.

  10. Tenzin Lamsang should dig grave yards of those who were influential and high profile people right from 1907 to expose degrees of corruptions then and compare with the present ones. If a hole is dug, one is sure to find stone pebbles and decayed fossils.Hence there should be time frame for everything.

  11. Two questionable leaders of DMT (Ex-Dzongda)and many other leaders terminated By HM and Home Ministers should not be allowed to contest and form political Party because of their questionable integrity.Bhutan want a clean and safe environment.

    • Do they have criminal cases registered against them? If they do not, let them contest, after all its HM K4 who introduced democracy, and am sure the ECB rules were made after proper consideration of everything.

      Its our job as the citizens of the country to learn more about the contestants and make the better decision on who to vote for.

  12. Tenzin Lamzang, it will be encouraging if you could bring the issue of new parties who were involved in corruption and criminal activities during there service as Ex-Dzongda and many of them have  looted the Government Properties.Ex-Dzongda and lam have created many divisive policies, and taken so much mileage from the situation.Such  a people should have no place for the Political party.Cover all the issues who try to misuse the power taking the advantage of family background. 

    • You would have a better chance of winning a lottery than TL doing a story on the lines that you have suggested, this paper and the proprietor have their heads stuck in digging up only stories that have a DPT connection to it, any other story is of no interest to them.

      That’s why I have and will continue to question the motives of this paper.

      • hahahahahaha .i think this paper doesnt give a fish about the reservations you have about it. all the values that you stand for ..  they dont care about what you think or feel about it. 

        • Ha ha ha the delusions of the monk(ey)

          • Haha, Ms Himalaya, the small child in you happy with taking these cheap shots.

        • I think this paper should, if they want to portray themselves as a paper that is not seen as biased, that’s what all papers strive to be, if you don’t know anything about journalism, don’t make a fool of yourself by making such stupid remarks.

          • drukpa drukpa

            haha ..  now you take to show this paper how to portray themselves. and you talk about journalism to journalists who are bold enough to run these stories. talking about journalism, i think you are one of them rival journos of this paper.. or perhaps a close one to the draconian government. are you rigden? are you PMO?   haha ..   doesnt matter you will never be able to do what this paper is doing!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!   go eat poop

  13. This ministers are building 5 stars hotel here and there they should be investigated from where they get prime land and money.

    • It is only fair to investigate all the people alive or dead who served as ministers, even as secretaries and directors who accumulated so much wealth and handed down to their families. 

      I don’t find it fair though we must keep the current government in check from getting corrupted that we throw all the problems of the past to them. 

      • No matter what may but THIS LOTTERY SCAM has to dealt with despite the Govt. having simply abolished it for reasons best known to them only. A host of beneficiaries are involved in this scam right from Finance Ministers, Finance Secretaries,Directors of Customs and Revenues and ofcourse the Director of Loterry himself and his own staff. I would re-iterate that unless this Loterry Scam(which have disgraced both the nations’ prestige) is thoroughly investigated and perperators are brought to books, it is of no point for any scams to be worth talking about. When the Kingpin of this scam is already behind bars on his own soil why not his counterparts behind bars in our soil, that is a big question mark (?) ACC should have co-operated with the CBI team from India to probe this but it is sad that nothing had happened because of the lukewarm response from our Govt. The corruption of this magnitude should be probed at all cost no matter what the delay in its process.

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