An Anti Corruption Commission (ACC) investigation has found that the Assistant Branch Manager of Bhutan Development Bank Limited (BDBL) branch in Pemagatshel, Phurpa Gyeltshen, embezzled around Nu 11.76 mn from the both the Gelephu and Pemagatshel branches.
The embezzlement started as early as 2012 when he was the Product Service Officer (PSO) and also doubled up as the Assistant Branch Manager for the Gelephu branch and continued during his Pemagatshel posting.
As a PSO, Phurpa Gyeltshen handled opening of loan accounts, loan application documentation and also field withdrawal and collections.
The ACC investigation found that his direct and frequent contact with the clients during the scheduled visit to the gewogs enabled him to know the clients closely.
This opportunity was abused to target the individuals or clients who were mostly illiterate or lived alone and were farmers.
Having full confidence on the inability of the clients in verifying these loans issued against their names, he filled in the loan appraisal forms and put his thumb impression on behalf of the clients.
Phurpa Gyeltshen created fictitious loan accounts by using key documents related to mortgage and authorization from closed files of ex-clients.
These fictitious loans were prepared and approved whenever he officiated as the Branch Manager.
The loan amounts were disbursed into clients saving accounts and later withdrawn by him after forging the signature of the clients either from the counter or the field. The withdrawal slips, already filled in by him, were handed them over to the cashiers during peak hours with an excuse that the client was in hurry and had left the withdrawal slip with him.
In a few instances, he used random bank clients to make withdrawals from the counters by providing fake authorization of the actual account holders to avoid suspicion.
In some instances, he withdrew cash in the field from the fictitious accounts.
With the embezzled money he bought a 50 decimal plot for himself, a hotel for his girlfriend and lent and borrowed money to and from many individuals for some business ventures.
When these loans fell due for repayments, he created and sanctioned new loans to repay the loans that are due. Once he was transferred to Pemagatshel from Gelephu, he used the same modus operandi to repay the outstanding loans of Gelephu clients either by directly depositing himself or by using few individuals like Damcho Wangdi and Tashi Jamtsho, both clients of BDBL, Pemagatshel branch.
In total he created 36 fictitious accounts from which 19 accounts were under Gelephu branch and 17 accounts under Pemagatshel branch. The total embezzled amount comes to Nu. 11.764 mn of which Nu. 3.050 mn and Nu.8.472 mn belongs to Gelephu and Pemagatshel branch respectively. However, some of the loan accounts are already closed.
Furthermore, he had also embezzled Nu 242,015 from the Farmer Outreach Banking (FOB) collection for the month of June, 2017 from two Gewogs and one chiwog in Pemagatshel namely, Khar, Yurung and Khangma. As per the operation standard, he was supposed to deposit the field collection within three working days after reporting to the office. He failed to deposit the same. Therefore, his total restitution amount adds up to Nu. 7 mn along with 24 percent penal interest.
The ACC has also asked the court to seize his 50 decimal land in Sarpang which ACC froze as it was bought from the embezzled money and so could be deducted from the Nu 7 mn and its penal interest.
The ACC’s investigation found that Phurpa Gyeltshen’s illicit activities did not remain completely oblivious to the management.
In fact, as soon as he got transferred to Pemagatshel branch, the new PSOs serving his previous gewogs in Gelephu were informed by some clients that the loans in their names were never taken by them, in addition to few clients personally lodging loan denial complaint to the then Chief Manager of Gelephu branch, Mr Yonten.
Subsequently, the Regional Manager was also informed by the branch. However, besides informing Phurpa Gyeltshen on the loan denial issues raised by the clients, the management did not take serious action against the issue which led to the continued embezzlement of funds from Pemagatshel branch to cover up the accounts created in Gelephu branch.
Phurpa Gyeltshen has been found liable for offence of ‘Embezzlement of funds or securities by public servant’ under section 52 of Anti Corruption Act of Bhutan (ACAB) 2011. Furthermore, he is also found liable for offence of ‘Commission amounting to abuse of function’ under section 58(1) of ACAB 2011 and ‘Forgery’ under section 296(d) of Penal Code 2004.
The ACC found Damcho Wangdi is also involved or associated with the embezzlement of the rural credit fund of the Bank and hence he is found liable for offence of ‘Concealment of corruption proceeds’ under section 73(b) of ACAB 2011. He had withdrawn Nu 1.2 mn in fake loans that Phurpa helped him to get, but he absconded when the fraud came to light.
The issue first came to light when on 17th July 2017, the BDBL reported to the Royal Bhutan Police (RBP) in Pemagatshel that Phurpa Gyeltshen, Assistant Branch Manager had embezzled more than Nu 3.8 mn by forging documents in the name of eight individuals.
This case was registered by the RBP as a forgery case. Subsequently, Phurpa Gyeltshen was arrested from Pemagatshel town and was detained for further enquiry. A preliminary investigation was launched by the RBP and later the case was forwarded to ACC on 28th August 2017. The Commission initiated the investigation into the alleged embezzlement of fund from 4th September 2017.
Phurpa Gyeltshen had joined the Bank as a Dzongkhag Credit Assistant (DCA) on 1st April 2000 at Chukha Branch and was later transferred to Sarpang, Gelephu and Pemagatshel as Branch Assistant and Product Service Officer in 2010, 2011, 2015 respectively.
He was entrusted with the job responsibilities of meeting the overall banking requirements of his assigned gewogs which include making loan appraisals, visiting the Gewogs for Farmers Outreach Banking, mobilizing savings and catering to other banking needs.
The case has been sent to the Office of the Attorney General (OAG) for prosecution and Phurpa is currently out on bail after giving a surety.