The Bhutanese Leading the way.
In what is the most senior figure detained till date, the Anti Corruption Commission recently detained the Deputy CEO of the DrukPNB bank and a credit officer from the Thimphu branch of the bank.
The two were detained for some days after seeking a remand order from the court and both are now said to be released.
The detention was with relation to the loans given to Phuentsholing businessman Phajo Nidup.
Of all the banks that gave loans to Phajo it has now been found out that DrukPNB may be having the highest exposure with loans of around Nu 320 mn.
The Deputy CEO was detained as the ACC is investigating how such huge loans were given to Phajo by the bank.
The investigation is to also do with the loan sanction powers of the Deputy CEO.
The credit officer was also detained over loans to Phajo.
Phajo owns two factories of a Mineral water plant and and Bhutan Ply he had purchased from others. The loans were for the two projects.
Earlier, a loan manager from Phuentsholing BoB and two other credit related officers were also detained by the ACC as part of its investigation.
BoB may come a close second to DrukPNB in terms of exposure to Phajo with around Nu 303 mn.
The ACC investigation is to see if there was active collusion by bank officials with Phajo Nidup as not only are the loans Non Performing Loans, but there were cases of double and triple mortgages for the same land, multiple loans from the same plot, not waiting for lien noting or confirmation to see if the land is mortgaged before releasing loans and many other issues.
Before a person is detained ACC needs to go to court for a remand order and convince the court. The court will not give such an order unless collusion is suspected or if the person is not being cooperative.
Meanwhile the DrukPNB CEO Vijay Kumar said that the ACC is doing its investigation and are asking many questions about the case, but ACC has not informed them what it is investigating.
The CEO said that the Deputy CEO had been called for questioning by ACC along with a credit officer.
The CEO said the loans had happened before his time and so he does not have the details.
He said the ACC questions are on why the loan was given, who gave it and how it was given. The CEO said the fact that the Deputy CEO and the credit officer were questioned by the ACC does not mean they are accused of collusion.
While ACC had detained officials from BoB and DrukPNB with the main focus being there, it has been questioning officials across banks as part of its investigation.
The Banks in total are laying a claim of around Nu 800 mn against Phajo in a special bench in the Supreme Court set up for Phajo’s many cases.
He faces around 60 plus cases in total from not only banks but also private individuals over land and money deals and the cases are only growing in number.
As per past figures Phajo owes BNB around Nu 57 mn, RICBL around Nu 40 mn, BDBL around 10 mn and T-Bank around 10 mn though figures may have changed.
Before the two banks the ACC had also detained officials from the National Land Commission, RSTA and Phuentsholing Thromde where the ACC has completed its investigations.
The ACC case against three NLC officials for issuing 15 duplicate Lagthrams in return for bribes of Nu 80,000 to 140,000 have already been charge sheeted to court. The duplicate lagthrams meant that even if Phajo’s original lagthrams were with the banks, he could use it again to secure loans from other banks on the same lagthram thus engaging in double and even triple mortgages.
This is also charge sheets coming up against RSTA officials for fake blue books and Phuentsholing Thromde land officials over lien noting which is not letting banks and clients know that Phajo had already mortgaged the land with other banks.
Phajo also bribed people in Phuentsholing Thromde as this was the place where banks and people would check if Phajo’s Thrams had loans against them or not. There were many instances such records were not kept and so Phajo could keep taking double and triple mortgages.
He also bribed people in RSTA as fake blue books allowed Phajo to take loans against these books.
Phajo is understood to have confessed to the bribes to the ACC and they were in both cash and kind. One of the in kind bribes was furniture.
Phajo chose to bribe officials at the more junior levels as they would often have financial problems and thus be more vulnerable.
Phajo had also resorted to bribing people in the Banks so that his loans could get facilitated, his double and triple mortgages would not be questioned, he could enhance his loans etc.
The ACC had sent the RSTA cases in December 2022 to the OAG but an apparent manpower shortage of prosecutors in the OAG has delayed the charge sheet in court.
ACC had started the banks investigations after finishing with the above agencies.
ACC cases had been filed against Phajo not only by private individuals who felt cheated by him, but also the banks. This is after they approached the police and were directed to the ACC.
The RMA is also understood to have forwarded the matter to the ACC after the huge NPL stockpile of Phajo was suspected to be more than just an ordinary NPL.
Phajo speaks
Phajo Nidup who was recently released after a long spell of detentions by RBP over bounced cheques and then ACC over its investigation claimed that he does not owe the banks Nu 800 mn but only 600 mn and he is contesting the figure in court.
On the issue of bribes, he said he had given some money to some people as gifts after working with them for a long time but the ACC is now taking them to be bribes.
Phajo claimed that his land assets held by the banks are far more valuable than the loans.
He claimed to have 100 acres of land mainly in the Phuentsholing town and rural area under his name and that of his wife and he said it is worth around Nu 4 to 4.5 billion (bn), more than enough to cover his loans.
He said he could not sell the lands to pay the loan from 2019 onwards as the banks did not allow it.
In an interesting twist Phajo accuses DrukPNB of cheating him and he said he has instead filed a case against DrukPNB bank as the bank had sold him 7.90 acres of land in Phuentsholing since 2018 for which he paid Nu 54 mn but there are several issues with the plots sold to him.
He said 4 acres of land sold to him are already double mortgaged with BDBL and so he has not received the Thram. Then in the case of 1.90 acres land the bank showed him the land somewhere near the road but the actual land on the thram was in a more remote area.
He said in the case of 2 acres land, the bank sold him E 1 land on which building is not allowed.
Phajo also said in 2021 and 2022 he had paid back banks Nu 70 mn.
