Royal racket: NRI tries to fleece King
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Royal racket: NRI tries to fleece King

The cash-strapped Nepal government is looking at desperate measures and becoming target of money launderers.

india Updated: Apr 13, 2006 23:44 IST
Indo-Asian News Service
Indo-Asian News Service

The cash-strapped Nepal government is becoming the target of overseas conmen.

A dubious Britain-based organisation, headed by a Non-Resident Indian (NRI), is trying to snare the royalist government by offering to lend high sums of money at ridiculously low interest rates.

With foreign assistance drying up and domestic revenue mobilisation being hit by a spate of blockades and closures, King Gyanendra's government is looking at desperate measures - and becoming the target of money launderers.

Triad Finance Ltd, based in London and headed by British passport holder, Prashant Dey, recently approached the Nepal government through its representative office in Kolkata, offering to lend $150 million payable in 20 years at less than one per cent interest.

According to a Nepali weekly, State Minister for Finance Rup Jyoti, who almost convinced the King and started the process for finalising the deal, took up the offer.

However, the King, who was a businessman before he ascended the throne, wanted a background check on the company.

The investigation found no evidence of assets or balance sheet and the deal was dropped.

This is not the first time that overseas companies have approached the government with such tempting offers. Prior to Triad, an Australian firm offered a loan of up to $500 million.

Nepal has an unfortunate track record of being taken in by dodgy companies.

Almost 25 years ago, a similar deal resulted in a company misusing the bank guarantee pledged by the country's central bank, Nepal Rastra Bank, to raise loans from elsewhere, creating a scandal.

The government lost a good deal of money and a senior central bank official had to resign.

"Why should a genuine company provide loans to a government that might fall any time?" said an opposition leader.

"Much of the loan would be used for weapons that are now being used on civilians to suppress anti-King protests. When a people's government comes to power, why should it honour the loan that contributed to its repression?"

First Published: Apr 13, 2006 17:22 IST