KATHMANDU: The government has voided the inquiry committee that was formed to probe Nepal Rastra Bank Governor Maha Prasad Adhikari.
Government spokesperson Prithvi Subba Gurung made this decision of the Council of Ministers taken on October 4, public on Sunday.
The committee had originally been formed on April 7, 2022, based on a decision by then Finance Minister Janardan Sharma to investigate against Governor Adhikari. However, the current government, led by KP Sharma Oli, overturned the decision three years later.
At that time, the cabinet led by Sher Bahadur Deuba had created the committee, chaired by former Supreme Court Justice Purushottam Bhandari, and placed Adhikari under suspension as part of the investigation.
Sharma was widely criticized for his handling of the economy, and it was alleged that he sought revenge after some of his proposals were blocked by Prime Minister Deuba and Adhikari.
One of the issues that triggered this conflict was related to a suspicious fund sent to the account of Prithvi Bahadur Shah from Achham, which was frozen by the central bank. Sharma had reportedly tried to intervene to release the funds, and when news of the incident spread, he became furious with the governor.
The Financial Crimes Enforcement Network (FinCEN) of the United States had requested the freezing of the funds and their return to the U.S.
This led the Financial Intelligence Unit (FIU) of the central bank to hold the funds and forward the case to the Department of Money Laundering Investigation.
At the time, the Ministry of Finance accused the central bank of lacking the capacity to fulfill its objectives and of leaking confidential information.
According to the Nepal Rastra Bank Act 2002, the government can remove a governor if it is found that they lack the capability to perform their duties, cause damage to the banking and financial system, or act dishonestly.
However, before dismissal, the governor must be given an opportunity to defend themselves, and an investigation committee’s recommendation is necessary.
Governor Adhikari was appointed by the Oli government. The tensions escalated between him and Finance Minister Sharma, leading to a complete breakdown in communication.
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