National CSI Development Bank Ltd., Paro

Agriculture and Finance Ministers questioned by ACC over appointment of now convicted CSI Board Director

A Conflict of Interest cloud hangs over the two ministers

The Minister for Agriculture and Forests Yeshey Penjor and Finance Minister Lyonpo Namgay Tshering were questioned by the Anti Corruption Commission (ACC) recently over the appointment of the former Board Director of the National Cottage and Small Industries Development Bank Limited (NCSIDBL) Tshewang Tashi.

The Agriculture Minister in fact talked about it on a social media app.

This is because Tshewang Tashi is currently embroiled in an ACC investigation where he as the Chairman of the Board Credit committee of NCSIDBL took part in giving his own son a Nu 5 mn loan for a meat processing unit. A few additional controversial loans approved under his chairmanship are also under investigation.

The two ministers were questioned as Tshewang Tashi was appointed as a board director from the Ministry of Agriculture and Forests (MoAF) in 2020 where he was a civil servant despite the ACC investigating a Nu 1 million (mn) bribery case against him for fixing a tender in the MoAF.

The case was given to the OAG in 2018 after which it was charged to court. Tshewang Tashi was convicted for bribery for three years and six months along with Sai Trading Partners CEO Samten on 22 August 2022 by the Thimphu District Court. (Story on Pg 3)

The Ministry of Finance (MoF) involvement comes in because as per the appointment process the MoF in consultation with the portfolio ministry which is MoAF is supposed to review and recommend the list of nominated board members to the cabinet.

The paper talked to the two ministers about why they were called and what did they say.

Going by the questions asked to the two ministers the ACC seems to have additional reasons to question them beyond just his appointment despite a corruption case.

In the case of the Finance Minister, he was asked about the fact that Tshewang Tashi is the brother of the minister’s former wife.

ACC is looking at a conflict of interest issue here given the family link.

In the case of the Agriculture Minister it seems he was asked about a loan that Tshewang authorized to a close friend of the Minister’s daughter. The loan for a facemask business had been previously rejected twice but Tshewang later got it approved on the third try.

Apart from the loans to Tshewang’s son and the minister’s daughter’s close friend a third loan given by the bank is also being examined.

The same committee headed by Tshewang also approved a loan to a company called Alpine which in turn used the money to do up the basement of the building owned by Tshewang in Babena where the company was located.

The loan to Tshewang’s son was also not given directly but a convict that Tshewang met while in detention in the bribery case was made to apply for the loan, but the loan actually went to his own son.

The three loans to the meat processing business, face mask and Alpine in total come to around Nu 15 mn of which two are already Non Performing Loans while a third loan is also about to become a NPL loan.

CSI bank loans do not require any collateral and so it will difficult for the bank to recover NPL loans.

The ACC also asked the two ministers why Tshewang was appointed when there was a corruption case against him, he had been suspended for a while and there was an active court case against him.

It was learnt from the MoAF that the ACC around 2018 had sent a letter to the ministry asking that Tshewang not be given any authoritative position or one that involved transaction of money.

Due to this letter, the Human Resource Committee of the ministry transferred him from his position as the Senior Livestock Production Officer in the Livestock Department to the Policy and Planning Division (PPD) where he received a promotion to the Deputy Chief Planning Officer, but the RCSC cancelled this promotion and he had to stay as a senior program officer.

However, despite the letter from ACC, soon enough the MoAF records show that Tshewang was called on to head the RNR Enterprise Development Coordination Unit (EDCU) which would involve having authority and being in charge of financial transactions.

The RNR EDCU functioned as an alternative marketing body to the Department of Agricultural and Marketing Cooperative (DAMC) whose fate was uncertain at the time due to a RCSC Organizational Development Exercise.

It was from this post that in 2020 he was nominated by the Ministry and the Minister to the post of the Board Director of the CSI Bank. Prior to the ACC detaining him for investigation in 2022 he had taken Extra Ordinary Leave for two years to set up a private company.

One matter is that there are no paper records to show that a proper process of evaluation was done on the candidacy of Tshewang for the board position either in the MoAF or in the MoF.

The MoAF and MoF will both have to present some evidence to ACC whether through documents or WhatsApp chat groups that a consultative and due process was followed.

An interview with the Prime Minister Dasho (Dr) Lotay Tshering on the issue also showed that the ACC had also questioned the Cabinet Secretariat on how the Cabinet took the decision despite the issues and the adverse record.

 Lyonpo Namgay responds

The Finance Minister Lyonpo Namgay Tshering said that it was the cabinet that gave the approval for the appointment after submission by the Finance Ministry based on the recommendation of the MoAF Minister.

He said Tshewang was not head hunted by the MoF, but the MoAF Minister as the head of MoAF which is the portfolio Ministry recommended his name to the MoF and due diligence was done by the Investment and Corporate Governance Division (ICGD) under Department of Macroeconomic Affairs (DMEA) of the MoF, and he as the minister only signed on the cabinet note for putting it up to the cabinet.

Lyonpo said he was not involved in any way in selecting Tshewang Rinzin but the MoAF Minister chose him as the CSI Bank caters to mainly agricultural loans and also based on his passion and contribution.

Lyonpo said the role of the MoF here is only secretarial in nature as the real discussion is with the portfolio minister.

On the issue of conflict of interest, the minister said that it does not arise as he had legally divorced his former wife in 2008 and he now has his current wife and children. He said a former brother-in-law cannot constitute conflict of interest and moreover he did not select Tshewang.

Lyonpo also said he did not get any letter from the ACC because if such a letter came then his appointment would have been stopped and he asked why there was no smartness in the system for this to be known. He asked why Tshewang had been reinstated as a civil servant at all.

He said the proposal was made by the MoAF and the MoF cannot be made the scape goat.

Lyonpo said the role of the MoF is that for every State Owned Enterprises submission it has to go from the desk of the MoF Minister though the discussion is with the portfolio minister.

The minister alleged that this is a case of a ‘black mask being put on a white man’.

 The Prime Minister responds

While MoF Minister said he had signed on the note to the cabinet proposing the name of Tshewang Tashi based on the nomination by the MoAF Minister and after due diligence by the ICGD, but playing no role in his selection, the Prime Minister Dasho Dr Lotay Tshering had a differing account of what happened in the cabinet.

The Prime Minister said that the MoF Minister came with a lots of possible board members, but that list did not have Tshewang Tashi’s name.

Lyonchhen claimed that in the cabinet meeting the MoAF Minister was the one to come with the name of Tshewang Tashi based on his qualities and this is what was agreed to by the cabinet.

The PM said Lyonpo Yeshey proposed his name as a pro active professional in the PPD of the ministry. Lyonchhen said that during the lockdown Tshewang was in charge of running the Centenary Farmer’s Market.

The PM said the MoAF Minister proposed his name as someone who is related to agriculture marketing and enterprises, is very professional and pro active and so no one objected to his name.

Lyonchhen said that at the time the ACC had not informed the cabinet or objected to the appointment and he had only heard informally bits and pieces, but did not take it seriously.

The PM said while he was suspended for a while, he had been reinstated too. He said if he was in the ACC radar then they should have informed him and he would have been removed.

Lyonchhen said normally the practice is to decide on an issue or agenda, wait for a week and then endorse it unless it is an urgent matter. Here the PM said the ACC asked why the Cabinet did not wait a week like in other cases and the PM replied saying this is not a hard and fast rule to wait.

Lyonchhen said before a cabinet meeting the agenda four is to declare conflict of interest and here it did not apply to Lyonpo Namgay as it was his former brother-in-law.

Lyonchhen said conflict of interest only applies in case of near relatives like children and others or a close business associate.

The PM said that if there is any evidence of any Lyonpo benefitting from the appointment then they should let him know as it is his duty as the Prime Minister, head of the cabinet and the party President.

Lyonchhen said that in terms of the process of appointment in the cabinet he is accountable and it would have been wrong only if the ACC had informed them and they still went ahead and appointed him.

“Without the present ACC case, if today I heard Tshewang’s name I would have still supported his candidature. He knows the subject, he talks a lot of good sense knowing him and I did not know about the formal case,” said the PM.

Lyonchhen said he told the ACC that the agency should have sent letters to all the concerned individuals.

The PM pointed out that even the Royal Monetary Authority (RMA) had found him to be fit and proper for the board.

The Agriculture Minister Responds

Lyonpo Yeshey Penjor said that normally the MoF proposes the list of names for any SOEs or public companies board of directors and Lyonchhen normally opens up the floor for discussion.

Lyonpo backing up the Prime Minister’s statement said that Tshewang Tashi’s name was not there in the list of the MoF minister in the cabinet and he was asked to give an opinion.

Lyonpo said that he told the cabinet that around 68 percent of the CSI bank loan is mandated mainly for rural concentrating on agricultural and livestock purposes focused on food security.

He said for food security the value chain is a very important sector that needs to be promoted and so an interim RNR EDCU was set up in PPD where Tshewang was there from Livestock, and until then he had not seen or heard anything about Tshewang although he was in livestock since the minister does not have day to day interaction with the department other than the head of department.

Lyonpo said it was in the PPD in interacting with him whether it was on some presentations or project proposal he would come up with it very effectively and in a fast manner and anything he presented was convincing and he also had an enterprising ability.

“So I nominated him to the CSI board based on his capability, knowledge and enterprising sense,” he said.

Lyonpo said, “The ACC asked me why we nominated him with a corruption case in the court, but I said firstly Tshewang’s case was a private case and the ministry was never involved in the investigation or charging him to the court and he is fighting with a private legal representative in the court.”

“I was not officially informed of the corruption case, and secondly when I came to know informally about the case by the then Secretary Rinzin, even he never got the official report of the ACC and so both the minister and the secretary only had informal information that he has a corruption court case,” Lyonpo added.

The minister said he told the ACC that it never shared the case information formally.

Lyonpo said the ACC had sent directives to remove him from any authoritative or financial position which is why he was transferred from Livestock to RNR NDCU.

Lyonpo said ACC sent him back to the ministry on duty after suspending him and to him he is like any other civil servant as long as he is not convicted.

“There is no reason I should look down on him or discriminate against him or avoid him,” added Lyonpo.

He said when he is allowed to join the ministry on duty then Tshewang is a civil servant and so he has to make optimal use of him.

Lyonpo said only on seeing his ability he nominated him to the CSI Bank for technical reasons and not personal relations.

The minister said he was also not aware of the directions from the ACC on Tshewang only until the ACC told him when they questioned him and so Lyonpo checked this with the ministry later.

Lyonpo said that the Secretary told him informally about Tshewang having corruption charges in court and when the minister asked Tshewang about it Tshewang said it was all a personal conflict and differences case which was reported to ACC and he is now charged in court by the OAG and is fighting the case with his own legal representative.

“Here I told the ACC that if his corruption act was discovered by RAA or our ministry’s internal auditor and then reported to the ministry’s HRC and if the HRC directed the legal division to investigate and take the case to ACC and if the ministry’s lawyers was involved with OAG in fighting the case then I would call it the ministry’s official case. But nothing of that sort has happened,” said Lyonpo.

He said this is why it is Tshewang Tashi’s personal case and until and unless the court verdict comes out convicting him there is no reason for the minister as a person or as head of ministry to charge him, discriminate against him or mistreat him.

On the allegation that Lyonpo’s daughter’s close friend got a loan the minister said it is a totally false accusation and while his daughter knows the friend she never mentioned about his loan applications.

Lyonpo said he told ACC to have evidence to charge anyone and not on just superficial terms.

“I was cross checking with my daughter if she has ever made a recommendation for her friend which I am forgetting, but my daughter who is a law graduate, said that more than anything her father’s safety and responsibility is her priority and she can never think of recommending anyone’s name to me for loans and things.”

“My daughter was very firm that she has never recommended anything and in fact they are not even close friends but just know each other only,” said Lyonpo.

Lyonpo said that on the day he was questioned ACC was showing him the picture of the boy, but he had never seen him.

From the above, the two ministers and the Prime Minister have laid out a case for why Tshewang Tashi was appointed and claimed there was no official knowledge of his case, though it was reported in the media and ACC had suspended him and sent directives to the MoAF.

ACC had also sent a letter to the MoF asking if he is a fit candidate for the board but there had been no response.

Tshewang in addition to the CSI bank was also appointed as the board member of the Bhutan Livestock Development Corporation which is another State Owned Enterprise.

Tshewang’s personal facebook profile on 9 June 2021 during the heat of the Nganglam constituency elections had shared a post by the DNT sharing the PM’s message in Tshangla to the voters of the constituency.

Tshewang is currently removed from his board position in the CSI Bank.

The CSI Bank case is the most serious case or issue faced by the current government, and if the ACC makes a strong case implicating the two ministers, then it may also imperil the candidacy of the two ministers if not one of them.

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