In December 2017 the ACC had forwarded a case to the OAG with the charge that the former RICBL CEO, Namgyel Lhendup has embezzled Nu 237,907 from the Ex-gratia fund and CEO’s public relations fund of the RICBL without authorization from the management committee of the fund.
The OAG, two years later in July 2019, wrote to the ACC saying it is dropping the charges against the CEO.
Its main reasoning was that the PA of the CEO had made mistakes in withdrawing fund from the ex-gratia head as the non-existent ‘CEO’s Ex-gratia head’ when it meant to be withdrawn from the CEO’s public relations fund over which the CEO has prerogative. The withdrawals happened without approval from the management committee.
The OAG said the heads of ADM and General administration approved of the above releases.
The OAG said the RICBL CEO had said that the fund was meant to be released from the CEO’s PR fund. The OAG letter also said that the dealing officials had said they did not receive any instructions from the CEO to withdraw fund from the ex-gratia head.
The OAG also pointed to unused ex-gratia and CEO’s PR fund which lapsed to RICBL in 2016 and 2017.
The OAG also said that the RICBL CEO had receipts for his expenditures.
The OAG concluded that it was administrative lapses on the part of dealing officials for not correcting the non-existent CEO’s Ex-gratia fund.
The ACC in a detailed letter has raised 10 points. It says while the ACCanalyzed the reasons of OAG’s decision on dropping the criminal charges against the aforesaid individual, the Commission still feels that the case merits prosecution.
It says during the investigation, the CEO was provided the opportunity to explain and account the use of funds as implicated in the investigation report, yet he had failed to do so. However, after the investigation report was forwarded to OAG on 29th December 2017, he had submitted additional documents with receipts from individuals to justify the charged amount, to which the Commission was asked to validate the authenticity of the receipts by OAG vide letter No. OAG/PLD/2018-4261 dated June 5, 2018.
The Commission, after having reviewed those additional documents and receipts, had forwarded a subsequent report on 3rd August 2018 vide letter No. ACC/DoI/Branch-IV/(03/2017)/2019/937 to OAG, invalidating all those documents and receipts submitted by the CEO. In the subsequent report, the Commission has highlighted that most of the receipts were backdated to justify the amounts withdrawn by him and most importantly, those documents and receipts pertain to his personal donations/expenses which is not within the scope of the Ex-gratia fund.
It says his submissions of such additional documents to OAG from the philanthropic activity done by him for personal relations, is an attempt to cover-up wrongful acts committed in his capacity as the CEO and thus, his assertion based on such receipts cannot be considered as valid or bona-fide expenditures of RICBL.
The ACC says, ‘It is also to be clarified and submitted that, neither the CEO has accounted the use of funds, nor did the Commission validated the receipts, particularly on this allegation, as stated in your letter.’
Instructions by CEO
ACC says, ‘Further, as pointed out in your letter, the Commission agree that it is critical to determine whether the CEO has issued any instructions to withdraw money from the Ex-gratia fund to determine his culpable intent.’
It says in this regard, the Commission in its previous investigation report has already submitted that in 2016 and 2017, the CEO has taken numerous advances adjusting it through note-sheets without supporting bills and documents from the Ex-gratia, CEO’s PR fund and Donation. These note sheets were prepared by PA to the CEO upon the instructions of the CEO and accordingly, proposed for the release of funds routing it through the Head of GAD for approval.
The ACC said, in order to reconfirm and validate and further substantiate on the above matter, has called all the dealing officials of RICBL who were involved in this matter to ACC namely, the PA, former Head of GAD, former Administrative Officer and former HR Officer and accordingly obtained their statements.
To this, the dealing officials collectively claimed that they do not have the authority to decide on the budget head, since it is purely the prerogative of the CEO to decide from which budget head such expenditures need to be booked and accordingly, direct the PA to propose note sheets for the release of funds. The PA prepares the note sheet based on the CEO’s instructions specifying the budget head, the Administrative Officer and sometimes his officiating also signs on it and the Head of GAD approves it based on the note sheet proposed upon the instructions of the CEO. It says the additional statements obtained from the above-mentioned dealing officials are attached.
The ACC says that from these additional facts and information, it is established that the booking of the budget heads in particular disbursement of the funds from the Ex-gratia fund was purely done on the CEO’s specific instructions.
‘In addition, it is to be clarified and submitted that in the statements given to ACC, the dealing officials have neither stated that they receive no directives from the CEO for such fund release from the Ex-gratia nor did they assert that the CEO cannot be held accountable for the alleged release of funds as it was the dealing officials whose failure had resulted in the disbursement of funds form the Ex-gratia, instead of CEO’s PR fund. In fact, the PA asserted that “the withdrawals of funds from the Ex-gratia are done as per the verbal advice of the CEO” and accordingly the note sheets were prepared,’ says the ACC letter.
Accountability and gain
The Commission says it agrees that the disbursement of funds is at the sole discretion of the CEO for fulfilling corporate-social-responsibilities by way of donations and other contribution and is not defined in the General Insurance Claim Manual 2011. However, it is not the prerogative that is being questioned, but the failure to account the use of funds or absence of documents and records to show that the funds are being used for its intended purpose. Prerogative comes with accountability and therefore, the CEO is accountable for the funds used, particularly for which he himself has expended. Further, as stated in the previous investigation report, the CEO does not have the sole prerogative to use the specific budget for Ex-gratia and Donation without the endorsement of the RICBL management committee.
The Commission said it noticed that OAG did not mention on the charge against the CEO on the purchase of a secondhand television stand from the RICBL for his personal use at home from the Ex-gratia. Even the note-sheet for releasing the fund for the same from Ex-gratia reveals that it was purely done on the instruction of the CEO. This was accepted by the CEO himself during the investigation says the ACC.
‘Thus, the OAG’s justification that the CEO had neither gained any material benefit from the alleged embezzlement nor had the intention to misuse funds from the Ex-gratia for his own vested interest does not stand in coherence with the facts of the case,’ says the ACC.
ACC said it was also indicated in the OAG letter that out of the allocated budgets, the CEO has spent Nu. 200,000.00 in 2016 and Nu. 85,000.00 in 2017 from the CEO’s PR fund and Nu. 117,907 and Nu. 120,000.00 in 2016 & 2017 respectively from the Ex-gratia fund and there remained a total unused budget of Nu. 715,000.00 under CEO’s PR Fund & Nu. 672,093.00 underEx-gratia.
In this regard, the Commission said it would like to clarify and submit that the ACC’s investigation report reflected only the expenditure amounts which were adjusted through note sheets without supporting bills and documents under the three budget heads of CEO’s PR Fund, Ex-gratia and Donation for the years 2016 & 2017 and not the overall expenditures incurred under the respective budget head.
ACC said the accounts statements of the RICBL reveals that the allocated budget for Ex-gratia and CEO’s PR fund in 2016 was exhausted, whereas in 2017 there was a balance of Nu. 12,570.00 under Ex-gratia and Nu. 3,09,875.00 under the CEO’s PR fund. The unused budged in 2017 was mainly due to the fact that the CEO was suspended from his office vide Suspension Order No. ACC/DoI-IVB/Case-14/2016/779 dated 7th July 2017 for the purpose of investigation.
It says based on the above facts and figures, and also on the multitude of serious corporate governance glitches questioning the safety of the public funds, the justification that the release of funds from the Ex-gratia fund is due to the wrong citation of the non-existent budget head by PA as there was sufficient fund balance in the CEO’s PR fund to meet the alleged release cannot be held as a conclusive ground for dropping the criminal charges against the CEO.
Not administrative lapse
ACC says the above-mentioned dealing officials only acted upon the instructions of the CEO. As asserted by these dealing officials, they neither had the authority to decide on the budget head nor to notify the CEO for necessary corrections when he had specifically directed and instructed them to do so.
ACC says it was stated in their earlier statements that upon the release of the funds from the accounts, the cash advances were delivered to the CEO.
‘Thus, the CEO, has not only failed to account the use of funds but also abused the trust and confidence bestowed upon him by the Board in managing and using the public funds responsibly,’ says ACC.
ACC says that owing to the reasons of CEO’s own failure, the Commission feels that levelling as administrative lapses on the part of the dealing officials of RICBL is not appropriate and justifiable.
The Commission in its letter tells the OAG that during the investigation, those accused are given ample opportunities to explain on the issues and concerns pertaining to the subject matter under investigation. In the current scenario too, the former CEO was provided with opportunities to expound on the issues.
The Commission says it deems it legally incorrect to drop the case from criminal prosecution considering it nothing more than an administrative lapses on the part of the dealing officials.
The Commission, therefore, requested the Office of the Attorney General to kindly reconsider to prosecute the case considering the additional evidences and information submitted herewith.
If the OAG declines to cooperate the ACC like in the Trongsa land case has the option of prosecuting the case on its own.