The Bhutanese Leading the way.
Yet another victim of Phajo Nidup came forward as part of the multiple Phuentsholing land cases that involve the banks too and around Nu 657 mn in double and triple mortgages.
This victim’s case pertains to the 5 acres and 33 decimals in Pekarzhing, Phuentsholing that Phajo fraudulently sold to 12 buyers and then did not transfer the Thram, but got it double mortgaged in Druk PNB and then sold it again to another buyer who got it triple mortgaged in RICBL.
Phajo in turn had acquired the land from a Menuka Nirola who had been unable to pay a loan of Nu 28 mn to Druk PNB.
Raju Upreti the Managing Director of Unicorn Infra Pvt Ltd was one of the 12 buyers and he bought 2 acres of that land in 2018 from Phajo for Nu 20 mn.
Raju said he never knew about Phajo or the land but while applying for some industrial land in Phuentsholing Thromde for a FDI project the Land Record Assistant there Chimey Lhaden told him about industrial land being on sale by Phajo Nidup and she gave him Phajo’s contact details.
Raju met Phajo at his office in Phuentsholing where Phajo showed him the 5 acres 33 decimal Lagthram owned by Menuka Nirola which he said he bought as Menuka was unable to pay a loan (Nu 28 mn).
They did the negotiations and drew up the sale deed of 2 acres for Nu 20 mn on 22 June 2018. Raju paid him an advance of Nu 5 mn. Phajo kept pestering Raju for the remaining money even before the thram was transferred, and so on the recommendation of Phajo he decided to get a mortgage on the 2 acres’ land.
Raju also needed an Over Draft (OD) Loan account for his boulder export business.
Raju said Phajo told him not to worry as he has good contacts in the banks. BNB offered a valuation of Nu 250 to Nu 300 per square feet for the land, while BoB Phuentsholing offered him a higher valuation of Nu 635 per square feet.
Raju took an OD of Nu 11.8 mn from BoB with the original lagthram deposited at the bank.
Raju then got some work with the hydropower construction company Hindustan Construction Company (HCC) and here again Phajo helped him to get another OD loan of Nu 8 mn from Bob Gedu Branch on the same asset which had remaining value. Both the OD loans were given in July 2018.
Raju then through his company paid Phajo another Nu 11.5 mn with the total payment now coming to Nu 16.5 mn.
He said the then credit head of BoB Phuentsholing Dorji Wangchuk and then Brach Manager of BoB Gedu Kessang Tashi were aware of the loan and the conditions.
Raju said that even Phuentsholing Thromde’s land division was made aware of the mortgage on the land as he and Phajo had approached the Thromde land section to transfer the name to his, but the Thromde had said that the Thram was still in Menuka’s name and the transaction could only be done once it came to Phajo’s name.
Raju said that apart from Phajo’s assurances to transfer the land what gave him real comfort was that the original lagthram was in the bank under mortgage and so no other transaction would be possible.
When Raju enquired later about the land transfer, in 30 July 2018 Phajo sent a copy of the verdict transferring the name to Phajo from Menuka and he assured to transfer the land to Raju. A copy was also sent to the bank.
As part of the agreement to pay the OD loan in Phuentsholing Raju had allowed the bank to deduct 25 percent of any letter of credit payment coming to him from Bangladesh.
However, Raju said that starting from January 2019 the bank started deducting 50 and even 100 percent leaving him with no money.
Even the Gedu branch asked HCC to route all payments to Raju through the bank OD account.
Raju said the banks were doing this because they knew Phajo had sold the land to somebody else and was trying to recover their loan without telling him.
He said when he finally found out that Phajo had sold the land to somebody else he had asked the bank manager how this can be, and when the land is hypothecated (pledged property as security for loan) how can it can be sold to somebody else. The manager said they would enquire. The bank asked Raju to clear his loans but Raju said he would only do it when the bank recovered his collateral.
Raju said that Gedu branch also illegally deducted some money from his personal savings account for the debt on the private limited company.
Raju said that normally when clients refuse to pay loans it becomes NPL and court proceedings are done to seize the collateral but here the collateral itself had been transferred.
Phajo kept ignoring Raju’s calls until he could track him down and on 18 October 2019 Phajo signed another agreement agreeing to either transfer the land or pay the money owed to Raju and the loan interest rates. However, even this agreement has not been honored.
Raju said that Phajo would not have been able to pull off so many scams without the involvement of some people on the inside.
He said while others have to go to banks to get loans and undergo scrutiny he saw bank credit officials of different banks visiting Phajo in his office.
Raju said that even in the case of the Menuka Nirola land it should have been auctioned by Druk PNB as per their process, but given’s Phajo’s links someone from Druk PNB informed Phajo about the land.
The then BoB Phuentsholing credit head Dorji Wangchuk who has resigned from BoB said that the bank on its part had done all the due process and paperwork in processing the loan. He sad the bank had also sent Thromde the Lien Noting form which is for verification and to make an official claim on the Thram against the mortgage. However, Dorji said that he also does not want to blame thromde.
By this logic the Thromde had been informed of the mortgage, but it is a mystery how the transaction was still allowed from Phajo to another buyer and the double and triple mortgages.
Dorji said that on the valuation rates BoB and BNB offer different rates which could be higher or lower depending on the land.
Dorji denied that BoB knew about the collateral being not real or being sold to someone else which is why large deductions started being made.
The then Gedu BoB Kessang Tashi has also resigned and is now in Australia.
The Thromde land record officer Chimey Lhaden said that she does not remember telling Raju about Phajo, but even if she or her other colleagues did then Raju should have done his due diligence check and homework as it is a transaction between two private parties.
Chimey denied that the land section of the Thromde was aware about the transaction between Phajo and Raju saying that they would only be aware once papers are officially uploaded.
When asked on why the Thromde did not keep a record of the BoB’S Lien Noting informing them of a mortgage she said that as said by the Executive Secretary (in an earlier interview) there was no instruction or system to keep such records.
Chimey instead questioned the banks saying normally the banks easily trace all the other loans that a person has against a collateral, but why in the case of Phajo Nidup they failed to do so.
She said that the Thromde transferred the land to Phajo from Menuka as there was a district court verdict to do so and so on.
However, when another land buyer Sonam Phuentsho was cheated of land he bought from Phajo he filed a case and won with the court ordering the land be transferred to Sonam but the thromde informed the court this was not possible as the land was double and triple mortgaged.
Background
Phajo Nidup the owner of Choden Transport and Bhutan Ply in Phuentsholing, bought large amounts of land in Phuentsholing on loan and then sold the land to private buyers, but instead of transferring the Thrams to them he double and triple mortgaged the same Thrams in banks and also managed to sell the same land under mortgage several times over to different buyers.
His victims and the banks have filed multiple cases on the issue in the Phuentsholing Dungkhag Court and Chukha Dzongkhag Court.
The Royal Monetary Authority (RMA) looked into the issue and found Nu 657 mn in double and triple mortgages and forwarded the case to the Anti Corruption Commission (ACC) for investigation.
In some cases, the verdicts asked him to pay the private land buyers two years ago, but he did not and so arrest warrants were issued but they were stayed by the current Chief Justice of the Supreme Court twice and so he was roaming around freely until 13 June 2022 when he was detained by the police in a separate fraudulent check writing cases (see story on page 1) while purchasing land in Paro.
