The Office of the Attorney General (OAG) filed 23 fronting cases in the Phuntsholing Dungkhag court on Friday. These cases were forwarded to it by the Anti Corruption Commission (ACC) which is investigating fronting in Phuntsholing.
The OAG has filed a civil suit seeking the restitution of Nu 8.62 mn in fronting commissions received by the original Bhutanese license owners and a separate Nu 202.79 mn from mainly Indian traders as a 9.75 percent interest component for the rupee taken by them from the Royal Monetary Authority for illegal imports.
The 9.75 percent interest rate was calculated based on the interest that the RMA was paying Indian banks from 2011 onwards for borrowing rupee.
There are around 50 defendants around half of which are the real Bhutanese license owners the other half are Indian nationals using this license to do business in Bhutan.
While the ACC asked the OAG to file a criminal case of ‘commercial bribery’ for the 23 cases, the OAG using its own legal arguments decided to file a civil case citing legal sections and other precedents. A criminal case would have lead to imprisonment from three upto 15 years (see separate story on pg 1).
The single biggest INR interest restitution is from a Naresh Bansal for Nu 39.36 mn while the single biggest commission restitution is from a Sonam Wangmo of Rabten Roadways for Nu 11 mn.
The former Department of Revenue and Customs Director Choyzang Tashi’s family members names have also been mentioned for three licenses of Tee Dee Enterprise (sister in law), Sonam Beer Agency (mother in law) and Yeshey cement (wife). The report alleges that commissions amounting to a total of Nu 632,916 was received by the former Director.
However, the Phuntsholing Dungkhag court will have a practical problem of summoning the Indian traders, most of whom have already left or fled from Bhutan. According to official sources as a result it is highly unlikely that the court can recover the Nu 202.79 mn as INR interest from the traders.
The story for the Bhutanese license owners will be different as the court can summon them and also ask them to restitute the commission money.
Apart from restitution, the OAG will be asking for the revoking of their license and all other licenses, additional Nu 10,000 fine and they will also be ineligible for future business licenses.