Labour DG facilitated illegal license for BEO, ignored student complaints and sided with BEO: ACC Investigation

Ex-Minister and DG both took financial assistance from the Indian agent in the IIWS case but were at odds in the Japan case

BEO is supposed to refund translation fees to students

The Anti Corruption Commission (ACC) sent its investigation report to the OAG on Friday for prosecution of the former Minister of Labour and Human Resources Ngeema Sangay Tshempo, Director General of the Department of Employment and Human Resources (DoEHR) Sherab Tenzin and Program Officer Ugyen Tashi.

While the former minister and the current DoEHR DG both benefitted financially from the Indian training provider, both were at odds over the Japan program with the minister questioning its various aspects and even trying to curtail some it, but the DG, according to ACC, acted in the interest of Bhutan Employment Overseas (BEO).

Last week, this paper carried revelations of the ACC investigation on how the former Labour Minister and the current DG financially benefitted from an Indian overseas training provider, Manav Dhingra, who headed IIWS.

The ACC’s final report to the OAG also has in-depth details on corruption and irregularities in the now controversial ‘Earn and Learn’ program in Japan. The bulk of the report, in fact, focuses on the Japan case.

Illegal licensing of BEO

In July 2016 the former minister Ngeema Sangay Tshempo had verbally instructed the DG Sherab Tenzin to freeze issuance of new and renewal of old overseas employment licenses due to growing controversies and complaints over human trafficking risks.

The report says the minister was not able to convey the same instruction to the new Labour Secretary Sonam Wangchuk who just been promoted.

DoEHR until September 2016 received five new applications for opening of overseas agencies but the DoEHR did not act on any of these applications.

However, in 24 November 2017 the BEO was given a registration certificate by the Labor Secretary who had assumed that DoEHR had done the due diligence.

On the same day, DG Sherab Tenzin was found to have sent a recommendation letter to the Ministry of Economic Affairs (MoEA) to issue trade license to BEO co-owner Jurmey Tshewang. Subsequently, on 30 November 2016, the MoEA issued a trade license to BEO as recommended by the MoLHR

The investigation team found incomplete application form submitted by Jurmey Tshewang with overwritten date. The investigation team did not find any pre-requisite documents and other formalities required by the ‘Regulation on Bhutanese Overseas Employment Agent, 2013’ prior to issuing the registration certificate. Further, the BEO’s foreign partners, Light Path Co., Japan and SND were not accredited by the MoLHR.

The ACC says that Jurmey Tshewang was illegally issued registration certificate for establishing BEO although he had failed to furnish key documents, which includes the notarized contract agreement as required under the rules.

The investigation also concluded that the BEO had changed its foreign partner from Light Path Company Ltd. to SND without following the due process as required by regulations.

The report says, “It is evident that DG Sherab Tenzin and Mr. Ugyen Tashi (Program Officer) had knowingly failed to exercise due diligence and failed in strictly implementing the Regulation on Bhutanese Overseas Employment Agent, 2013, which led to illegal issuance of license to BEO, ultimately benefitting Jurmey Tshewang and Tenzin Rigden (owners).”

Shielding of BEO from complaints by DG

Despite many allegations in the media and even complaints being lodged by students against BEO, the DG, as required by regulations, did not carry out official proceedings to look into the matter, says ACC.

The ACC report says, “Instead, he assumed the responsibility of BEO and responded to the students’ complaints (point by point) through email with copy to the Minister, Secretary and relevant program officials.”

“Despite promising the students that he would verify and inform the outcome of the verification, the DG chose to remain indifferent and do nothing on the issue,” says the report.

ACC says that in one email responding to an official complaint filed by students he was found to have used subtle threats to silence the students. “For instance, he ends his email response stating that if students strongly feel that they have been cheated or deliberately misguided, he would advise the agent to arrange their return so that the case can be dealt appropriately,” says the report.

The ACC says that instead Jurmey Tshewang is found to have emailed a copy of allegation received against BEO to DG Sherab Tenzin. “The inference drawn from this was the duo had discussed the matter before the receipt of formal complaints and DG Sherab was made to handle the issue,” says the report.

The ACC report says that it is certain that the DG had proactively defended BEO primarily to favor Jurmey Tshewang. It says this fact is corroborated by the call records of DG Sherab Tenzin, which reveals him making six calls to Jurmey Tshewang between 12 to 14 July 2017. Further, the DG was found supporting BEO or Mr. Jurmey Tshewang in other occasions.

The ACC report says that during the presentation of findings on 14 September 2017 of a monitoring team sent by the Minister to Japan, the DG defended the adverse findings on behalf of BEO, as if he was not a part of the monitoring team.

The findings pointed many gaps and discrepancies between what the agent had promised and the realities faced by students.

Review of call records of DG Sherab Tenzin reveals that he made several calls to Jurmey Tshewang – one call on 13th, one on 14th, two on 15th, and several more after that. All these calls were made using his private phone but during office hours.

The ACC report said that on 20 September 2017, during the orientation program conducted at Zilukha Middle Secondary School in Thimphu, the then Minister reminded students that loans were taken in their names and that they should have full rights to utilize it according to their wishes. The then Minister stated that he was infuriated by the fact that the BEO was directly handling the student’s loan. The witness accounts says that the Minister left the hall after the DG repudiated what the Minister had communicated to the youths attending the orientation program.

The witnesses shared that DG Sherab Tenzin behaved as if he was representing the agent. The analysis of call records around or following this incident shows that DG Sherab Tenzin made two calls to Mr. Jurmey Tshewang on 22nd, one on 25th and two on 26th September 2017

On 27 September 2017, based on the problems reported by the monitoring team, sent to Japan the Minister issued an Executive Order suspending the placement of third batch of students scheduled to leave in October 2017. Among others, the executive order asked the Secretary to conduct internal audit on previous two batches of students (129 in total) already placed in Japan and suspend the sanctioning of BDBL loan until further notice.

On the same day the BEO CEO submitted a written appeal to the Minister to lift the suspension with an undertaking that he would abide by the terms and conditions. The Minister then instructed the Director General to obtain proper undertaking from the BEO but despite BEO’s written undertaking, nothing changed on the ground.

Unauthorized Translation Fee and Visa Fee

The investigation observed that in violation of rules BEO not only charged other fees without actual basis but also exercised full control of students’ loans right from the beginning in such a way that it could conveniently deduct all tuition fees and costs including its agent commission upfront even before sending students to Japan.

The April 2017 BEO charged Nu 5,000 excess in airfare to each of around 67 students which was only refunded in October 2017 after an internal audit inspection.

The ACC report says that in violation of regulations, BEO, without any prior approval from MoLHR, had charged Nu 7,500 per student as translation fees in all three batches amounting to a total of Nu.3.832 million for 511 students.

It says that a review of the proposal submitted by BEO to the DoEHR, MoLHR reveals that BEO had not even reflected the translation fees in their cost breakdown.

The report said that BEO in connivance with SND has falsified the tax invoices AND money receipts for translation fee to be furnished to the investigation team.

The Commission in accordance with section 137 of ACAB 2011, has decided to refer the matter to MoLHR, instructing them to compel BEO to refund the above amount to the 511 students.

It was found that BEO collected visa fees and processing cost amounting to Nu. 3.414 million from 511 students of all three batches of youths sent to Japan (Nu. 6,682.00 per student), in violation of Regulation on Bhutanese Overseas Employment Agent, 2013.

However, 444 students did not get the refund after this rule had been amended based on a May 2017 note submitted to the former minister by the DG, Officiating Chief Employment Officer, Chimmi Rinzin  and program officer Ugyen Tashi.

The ACC report says, “The cycle of revising the regulation was completed only after the investigation was launched, which only infers the intention of DoEHR staff to safeguard the interest of BEO. Therefore, the Commission, in accordance with section 137 of ACAB 2011, has decided to refer the matter to relevant authority for appropriate administrative actions against the responsible officials.”

Financial benefit in Indian agent case

Investigation established that DG Sherab Tenzin, in order to set up his son’s business in Bhutan, not only sought financial assistance to the tune of over Rs. 589,000.00 from a foreign source but also engaged in a conduct that was in conflict with his public position as the DG of DoEHR, MoLHR.

Manav Dhingra, being a foreigner, is not allowed to invest or associate in any trade in Bhutan without prior consent of the Ministry of Economic Affairs (MoEA). Furthermore, Manav Dhingra, who manages IIWS is a training and placement contractor of MoLHR, who not only does or seeks to do business with MoLHR but also is regulated by DoEHR, MoLHR, which is headed by DG Sherab Tenzin.

In addition to the above, investigation found that DG Sherab Tenzin, despite having conflict of interest with Mr. Manav Dhingra, had participated as a member of the tender on 30th September 2016 where IIWS was one of the winning bidders

The investigation found that Manav Dhingra used to pay courtesy visits at former Lyonpo’s residence (Minister’s Enclave) Motithang, Thimphu, where they discussed about business ideas and placement of youths. In one of Manav Dhingra’s such visits sometime in 2016, former Lyonpo had proposed to jointly set up a heavy earth moving equipment hiring business. According to Mr. Manav Dhingra, the former Lyonpo proposed a number of business ideas and asked him to finance or be his business partner. Manav Dhingra stated that he eventually agreed to finance or be a partner in the proposed excavator hiring business. He stated that he decided to be 50% partner in the hiring business and invest Rs. 3 million to buy an excavator after hearing about the business viability from former Lyonpo.

It was found that former Lyonpo had asked Manav Dhingra to look for a Bhutanese citizen, who could be used as his front to operate the business in a legal manner. Manav Dhingra had then approached Dilu Giri, the General Manager of Druk Hotel, Thimphu, who agreed.

Subsequently on 15th April 2016, Tshomo Hiring was established and registered jointly in name of Dilu Giri and  Pema Tshomo Sherpa, who is the niece of former Lyonpo.

However, investigation found that the real beneficial owners of Tshomo Hiring are former Lyonpo Ngeema Sangay Tshempo and his wife.

In 2015, former Lyonpo Ngeema Sangay Tshempo, while on his overseas trip had transited from New Delhi. In New Delhi, he had met with  Manav Dhingra, where he had asked  Manav Dhingra to arrange for a gemstone and Rudraksh rosary. As requested, Manav Dhingra had arranged for the above items. However, investigation found that former Lyonpo had not made any payments for the above items till date. Manav Dhingra informed the ACC team that he had bought a gemstone and rudraksh rosary for former Lyonpo but payment from former Lyonpo is still outstanding.

Due to Lyonpo contesting the value of the jewellery ACC approached Ashish Malhotra (owner of Eurasia) and found the the cost of the gemstone (Yellow Sapphire) then was Rs. 85,000 and rudraksh rosary was Rs. 71,983.

Despite the above finding, investigation was not able to establish ‘quid pro quo’ relationship between former Lyonpo and Manav Dhingra since former Lyonpo was not a member of tender evaluation or committee. As such, investigation was not able to reveal or prove beyond reasonable doubt on how former Lyonpo had influenced the tender committee or favored Manav Dhingra by accepting the above valuables.

Nonetheless, the report says that former Lyonpo’s conduct of soliciting and accepting a gem stone from a prohibited source was found to be in conflict with his position as the then Minister of MoLHR and in violation of the Gift Rules of Bhutan 2009. Therefore, the Commission has decided to forfeit the above items and treat the items as state property in accordance with the Gift Rules of Bhutan 2009.

Other findings

The ACC said that DG Sherab had developed a relation beyond the professional one with Manav Dhingra, to the extent that he used to send his son to pick Mr. Manav Dhingra from the Paro Airport.

Manav Dhingra confessed of giving gifts like pens, mobiles and watches valued below Nu 9,000 to MoLHR staff. This was confirmed by Ugyen Tashi, who stated that he received a watch from Manav Dhingra but was returned later.

There were few instances, where Manav Dhingra had provided financial help to MoLHR staff. For instance, Ugyen Tashi was found to have borrowed Nu. 50,000 from Manav Dhingra, which he had repaid later. Similarly, DG Sherab Tenzin used to seek assistance from Manav Dhingra regarding arrangement of pocket money to his son, who was then studying in South Delhi There are no strong evidences but both of them stated that the money was repaid during Manav Dhingra’s visit to Bhutan.

Charges

According to the ACC the former minister is liable for one count of offence of False declarations with a view to conceal under the ACAB 2011 for deliberately making false declaration with a view to conceal his asset of excavator, hiring income and liabilities in his asset declaration for the year 2017.

DG Sherab Tenzin is liable for one count of offence of Failure to declare conflict of interest under the ACAB 2011 for failing to declare conflict of interest he had with Manav Dhingra and participating as a member of the tender committee, where IIWS was one of the winning bidders.

The above act is also in violation of the Code of Conduct and Ethics of Bhutan Civil Service Rules and Regulations 2012.

The DG is then liable for two counts of offence of Omission amounting to abuse of functions under the ACAB 2011. One is for deliberately failing to exercise due diligence and violating resulting in illegal issuance of license to BEO, ultimately benefitting Jurmey Tshewang and Tenzin Rigden.

The other is for deliberately failing to manage the complaints lodged by the students and youths and violating the Regulation on Bhutanese Overseas Employment Agent, 2013 only to safeguard the interest and favor BEO. The report says the above act is also in violation of the Code of Conduct and Ethics under BCSRR 2012.

Ugyen Tashi, Program Officer is liable for one count of offence of Omission amounting to abuse of functions under the ACAB 2011 for deliberately failing to exercise due diligence and violating Regulation on Bhutanese Overseas Employment Agent, 2013 resulting in illegal issuance of license to BEO, benefitting Jurmey Tshewang and Tenzin Rigden. The above act is also in violation of the Code of Conduct and Ethics under BCSR 2012.

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