Narayanhity royal palace in Kathmandu, has opened a can of worms with his book, Maile dekheko darbar (The court as I saw it).
The 599-page book, the author says, is based on his diary and observations, especially during the nearly four years that he served as military secretary, first to King Birendra and then, to his successor, King Gyanendra.
Shah says King Birendra, though a constitutional king, wanted to modernise the army and was seeking to buy "ultra modern" firearms.
The king, who was also the supreme commander of the army, had reached an agreement with German gun manufacturer Heckler and Koch to procure their G36 assault rifles.
Plans had also been made to assemble the weapons in Nepal and sell them in South Asia.
But Shah says the plan was anathema to India, since the bigger neighbour did not want Nepal to possess better arms and was pressuring it to buy its indigenous Insas group of firearms that were inferior in quality.
"I think the arms politics could be one of the major reasons behind the palace massacre," Shah says.
The other reason, he writes, could be the issue of granting citizenship to residents of the Terai plains, many of whom are of Indian origin.
Parliament was ready to confer citizenship on the community and had forwarded the bill to the king for his seal of approval.
However, King Birendra, instead of passing the bill, sent it to the Supreme Court for consideration and the apex court nixed it.
"Had the king put his seal of approval, within a few years Nepalis could have become a minority in Nepal," the former aide writes.
"After the bill was scrapped, a few senior Indian government officials expressed concern to the king."
Shah says that he was given a top secret file by the king, outlining Operation Eagle, a plan to resolve the growing Maoist insurgency.
Apparently, King Birendra was planning to seize power, start talks with the underground Maoists, concede some of their demands and bring them back to mainstream politics.
For that, he had been sending his younger brother, Prince Dhirendra, and a senior army official as his emissaries to talk with the Maoist leadership.
"At a time such a serious plan was being developed to resolve the crisis gripping the state, the palace massacre occurred mysteriously," he writes.
"My analysis and conclusion is that internal as well as foreign forces were involved."
Though Shah asserted during a televised interview that the actual killings were done by Birendra's son Dipendra, he says the crown prince, already smarting under his mother's tight rein, was incited by foreign forces.
While the government formed a commission to investigate the actual shooting June 1, 2001, it did not go beyond that to investigate the motive or the abettors.
As a democracy, India wanted monarchy in Nepal to end and so joined forces with Nepal's Maoist guerrillas, who also wanted the abolition of the crown.
Shah says given the meetings held between Nepal's political party leaders and the Maoists in India, it was inconceivable that the Indian intelligence agencies did not know about them.
Besides supporting these meets, he says India actively trained Nepal's Maoist guerrillas.
He claims the cat was let out of the bag when an armed police force team went to Chakrata in India's Uttarakhand state to receive arms training from the Indian authorities and learned that an earlier group, apparently Maoists, had also been trained there.
When he tried to investigate, Shah claims he was told by then King Gyanendra to resign under Indian pressure.