The Bhutanese Leading the way.
The last issue of The Bhutanese ran a story about Phajo Nidup’s conviction by the special bench including all others involved. It also talked about how collusion and illegalities took place in Phuentsholing Thromde, National Land Commission, Phuentsholing Dungkhag, RBP, RSTA, BDBL, BNB and the BoB Gedu branch.
This week the paper has got the stories on other agencies and institutions that were involved.
Over six years, from 2014 to 2019, Phajo Nidup engaged in a significant borrowing spree, acquiring 88 loans from multiple financial institutions. 78 out of the 88 loan accounts associated with Phajo Nidup had transformed into Non-Performing Loans (NPLs). As of December 2021, the total outstanding loans in Non-Performing Loans (NPL) stood at Nu. 818 million.
The NPL will have to be recovered in the civil cases coming up.
Phajo had offered to sell all his assets linked to the NPL loans to pay these loans before the judgment.
Of the Nu 818 mn the largest NPL is owed to Druk PNB at Nu 340.77 mn followed by BoBL at Nu 286.21 mn, BNB at Nu 52.71 mn, BDBL at Nu 44.14 mn, RICBL at Nu 37.32 mn, BIL at Nu 36.37 mn and T-bank at Nu 12.77 mn.
Druk PNB
Phajo Nidup fraudulently obtained a total of six loans totalling Nu. 357 million (mn) from Druk Punjab National Bank Ltd. within a year and a half from the beginning of 2018 with the bank officials’ complicit in the loan fraud. All the loans were sanctioned from the Corporate Office, Thimphu.
Three individuals’ loans had become NPL, and on 31/12/2018, their outstanding amounts were Nu. 55.938 mn Nu. 2.061 mn and Nu. 3.242 mn.
Phajo Nidup came to Druk PNB with a loan proposal for his companies Mountain Fresh Private Limited (MFPL) and Bhutan Ply Unit (BPU). The bank saw Phajo Nidup as a prospective buyer and proposed to him buying the distressed NPL properties, to which he agreed on the condition that the bank provides the loan to finance it.
DPNB’s management also hatched a conspiracy to clear the bank’s non-performing loans. Phajo Nidup was given a loan and made to buy the properties mortgaged against the NPL, which the bank was not able to auction to recover the loan amount even after repeated attempts.
The former CEO and the management of DPNB had promised to provide a loan to Phajo Nidup on the condition that he buy NPL properties.
In doing so, they violated auction terms and conditions and overlooked the policy of ensuring the end-use fund of the loan and instead adjusted the auction amount from the loan of BPU and MFPL. Arun Putthusseri Ramacha and former CEO Devendra Kumar Gupta processed and sanctioned Nu. 200 mn in the name of BPU and 50 mn in MFPL, respectively, while Deputy CEO Ash Bahadur Rai verified Nu. 250 mn in the name of BPU and 50 mn in MFPL at the corporate level.
In doing so, Ash Bahadur Rai received Nu. 100,000 in cash from Phajo Nidup.
The mandatory documents to process the loan against “Private Limited Companies’’ were not obtained. Thojey Zangpo, the appraising officer, failed to collect the required documents. Tshering, former Engineer, DPNB had inflated the value of 17 securities pledged to provide more loans to Phajo Nidup.
Phajo also deceived the bank by submitting fake documents to avail a transport loan of Nu. 9.5 mn. He had deceived the bank by submitting inflated income statements for the assessment of his repayment capacity.
BoBL Main Branch, Phuentsholing
Phajo Nidup, in collusion with officials of BoBL, Main Branch, Phuentsholing, had fraudulently availed a total of 22 loans, i.e., 11 transport loans and 11 overdraft loans amounting to Nu. 177.82 mn.
He also availed bank guarantee of Nu. 56 mn against the quotation for 20 vehicles issued by the Zimbi Motors. Phajo Nidup obtained these loans forging the guarantor’s signature in the loan documents, instructed his in-laws to create fake money receipts, and double-mortgaged the same land and vehicles with different banks.
Phajo Nidup paid a bribe of Nu. 8.361 mn in cash and kind to four officials of BoBL for their assistance in securing the loans.
Tashi Tenzin, Head of Credit, BoBL, Thimphu, had sanctioned or recommended a loan beyond the limit mentioned in the power of attorney and had not verified the CID no. of the guarantor in the CIB report. In return, he has received Nu. 200,000 and a kitchen cabinet costing Nu. 60,000 as gratification from Phajo Nidup.
Dorji Wangchuk, Loan Manager of BoBL Main Branch, Phuentsholing, had sanctioned/recommended loans beyond the limit mentioned in a power of attorney and had not verified mandatory documents like CIB and CRST reports. In addition, he had not deposited the transport loan amount to the dealer’s (STCBL) account and did not obtain the original Lag Thram. In return, he received Nu. 447,500 and two Mahindra Blazo trucks as gratification from Phajo Nidup.
Karma Tenzin, Phajo Nidup’s brother-in-law, obtained a trade license in his name and assisted Phajo Nidup in availing of the loan. He also issued fake money receipts to the principal of Pelden Tashi Choling Shedra as per Phajo Nidup’s instruction, which were later submitted to the bank.
Lam Leki Khandu, Principal of Pelden Tashi Choling Shedra, Phuentsholing, submitted a fake money receipt to the bank, stating that Dratshang has paid money to Nidup Enterprise with a forwarding letter upon the instruction of Phajo Nidup.
Karma Yeazer, Credit Officer of BoBL Main Branch, Phuentsholing, had not obtained the original Lag Thram, apprised the loan without obtaining the mortgage deed, and manipulated Phajo Nidup’s CIB report.
Bazar Branch, Phuentsholing, BoBL
Phajo Nidup fraudulently obtained five loans, one transport loan and four overdraft (OD) loans, totalling Nu. 71.77 mn from the BoBL Bazar Branch of Phuentsholing. He also obtained one transport loan of Nu. 2.52 mn in Chandra Maya Rai’s name from BoBL, Gomtu Branch. The transport loans were fraudulently obtained using fictitious quotations and money receipts issued by Zimbi Motors.
Similarly, OD facilities were availed against the work order and purchase order issued by agencies.
Tek Bdr. Tiwari, the credit officer, processed Phajo Nidup’s loan without obtaining clearance letters from RICBL and BDBL. As per the CIB report, Phajo’s loans were in NPL status at RICBL and BDBL. Tek also inflated the value of the land during the land valuation. Moreover, he manipulated a GPS payment letter to eDruk; accepted fictitious money receipts, did not execute loan documents in the presence of bank officials and within the bank premises which led to Phajo forging the documents.
Sagar Gurung and Sanjeev Nirola, both employees of Zimbi Motor, issued a fake money receipt to Phajo Nidup which was used to avail transport loan. Sangay Rabten, the General Manager of Zimbi Motor also issued fake money receipts to Phajo Nidup.
Apart from the above Phajo in connivance with the BoB Gedu branch manager had taken Nu 73.67 mn in loans from the Gedu Branch. The branch officials were prosecuted as mentioned in the last issue.
T-Bank Limited
Phajo Nidup was able to secure 8 loans amounting to Nu. 12.60 mn from T-bank with the help of Ashok Subba, the then credit officer of T-Bank Limited and Leki Dorji, Sales Executive of STCBL working in Phuentsholing.
Ashok Subba sanctioned one loan of Phajo Nidup before the loan application, and the relevant documents were submitted to the bank. He also issued a ‘Cancellation of Mortgage Charge’ letter for plot No. 1265 under Thram No.1589 before liquidating the loan. This resulted in double mortgaging of the land as Phajo availed another loan from a different bank using the letter of cancellation of mortgage charges. He also did not execute mortgage deeds and did not obtain lien noting for the mortgaged land under Thram No. 193 and Thram No. 908.
Phajo Nidup, using the fake bills and challan issued by Leki Dorji, secured three transport loans, which were disbursed directly into his savings account maintained in T-Bank. Leki Dorji fabricated documents to falsely portray that Phajo had purchased vehicles from STCBL. These forged documents were then used to secure loans.
RICBL
Phajo Nidup fraudulently obtained a total of four loans, amounting to Nu. 7.9 mn. The loans were obtained using fake documents and multiple land mortgages, with the complicity of RICBL officials.
Phajo Nidup had submitted an inflated income statement of Choden Transport. He had also executed a double mortgage of Thram number 2358 and had forged Karma Tenzin’s signature (forged the signature of the witness) on the mortgage deed. Similarly, he had submitted the fictitious money receipt and inflated quotation.
Neten Tshering, an Assistant Manager in Phuentsholing RICBL, had returned the original Lagthram of Thram No. 104 before the liquidation of the existing loan. In addition, he had knowingly returned the original Lagthram of Thram No. 2212 before liquidation of the loan. He had also knowingly not obtained the original Lagthram of Thram No. 2338. He didn’t obtain Choden’s signature on the mortgaged deed or the letter of guarantee.
Sanjeev Nirola, an Indian citizen and the accountant at Zimbi Motors, prepared and issued the fictitious money receipt to Phajo Nidup.
Sangay Rabten, General Manager at Zimbi Motors, had instructed Sanjeev Nirola to prepare and issue fictitious money receipts and inflate the price of the vehicles.
In total OAG filed charges against 51 suspects across 14 distinct ACC cases, encompassing allegations ranging from bribery to official misconduct, abuse of function, deceptive practices, aiding and abetting, and forgery. Among the suspects, 50 were convicted, albeit with minor adjustments to the charges.
In compliance with the court’s verdict, all convicted individuals are obligated to reimburse the state with the total bribe amount of Nu. 11 million.
Meanwhile, Phajo has appealed back to the same special bench asking for a lighter sentence.
