KATHMANDU: While Nepal’s prominent industrialists and investors are often well-known and publicly engaged, Niraj Gobinda Shrestha remains relatively obscure.
His low public profile contrasts sharply with his high-profile controversies linked to Nepal’s telecommunications company, Ncell.
Ncell Axiata Pvt Ltd has been embroiled in various disputes since its inception, with Shrestha, a non-resident Nepali businessman, reportedly at the center of significant controversies.
Recent government investigations have highlighted his involvement in evading billions in capital gains tax through the purchase and sale of Ncell shares, raising serious concerns about legal compliance.
The controversy surrounding Shrestha’s tax evasion has been ongoing, primarily revolving around the trading of shares.
Despite his status as a non-resident Nepali, Shrestha’s transactions involving local shares have drawn scrutiny.
On December 1, 2023, the Malaysian company Axiata Group announced the sale of its 100 percent shareholding in Reynolds Holdings, based in St. Kitts and Nevis, to Satishlal Acharya’s offshore entity, SpectraLite UK Limited.
Reynolds Holdings held 80 percent of Ncell, while the remaining 20 percent was owned by Sunivera Capital Ventures, controlled by Acharya’s wife, Bhawana Singh Shrestha.
The sale of these shares, initially purchased from Telia Sonera for NPR 1.44 trillion and sold seven years later for USD 50 million (approximately NPR 6.5 billion), sparked extensive debate among Nepal’s regulatory bodies, parliament, media, and political parties.
In response to mounting pressure, the government formed a five-member investigative committee, led by former Auditor General Tankamani Sharma Dangal, on December 7, 2023. This committee was tasked with probing the transactions involving Ncell shares.
When questioned about the delays, Supreme Court spokesperson Bedh Prasad Bhattarai explained that case progress has been affected by the automation process and a specific quota for corporate cases.
Khabarhub has obtained the committee’s report, submitted on January 29, following extensive research.
The report confirms that Niraj Gobinda Shrestha engaged in illegal share trading and evaded taxes related to Ncell.
It also recommends that the government further investigate Shrestha’s dealings and scrutinize his nationality.
Billions in capital gains tax evasion
Spice Nepal Pvt Ltd was established by Modi Corp Limited India, Spice Cell Limited India and Khaitan Group Limited Nepal to operate mobile services in Nepal on June 21, 2008.
Spice Nepal, which has been serially bought and sold since its inception, was renamed Ncell Pvt Ltd.
During share purchase and sale, 80 percent owned by Reynolds Holding, registered in St. Kitts and Nevis until March 20, 2012, and non-resident Nepalese and businessman Dr. Upendra Mahato owned 20 percent shares.
Ncell Case: Recommendation to take action against Upendra Mahato
At the same time, ie on March 29, 2012, Dr. Niraj Gobinda Shrestha entered Ncell by purchasing 20 percent shares owned by Upendra Mahato.
According to Telecommunication Policy, 2060, Nepalis should have at least 20 percent share in telecommunication service provider companies.
The share purchased through Mahato was under the local share.
Niraj Gobinda Shrestha kept the shares in his own possession for two years after joining Ncell.
He sold the 20 percent shares he owned to Sunivera Capital Ventures Pvt Ltd owned by Bhawana Singh Shrestha.
While buying shares from Upendra Mahato and selling the same shares to Sunivera Capital Ventures, it has been seen that Shrestha cheated the state on capital gains tax both times.
The matter pointed out by the Auditor General’s report, which is currently under consideration in the Supreme Court, has been confirmed by the government investigation.
The Office of the Auditor General mentioned on page 20 of its 54th report that Niraj Gobinda Shrestha evaded capital gains tax by under-invoicing when he sold 20 percent of his shares to Sunivera Capital Ventures.
According to the report of the General Accountant, Shrestha showed that he had sold his shares for 11.57 billion 60 million and after cutting expenses, he paid only 2.83 billion 1.5 million in taxes to the government.
Discrepancies and legal proceedings in Ncell share transactions involving Niraj Gobinda Shrestha
While Telia Sonera, which owned 80 percent of Ncell’s shares, sold its stake to Axiata for NPR 1.447 billion, discrepancies have emerged in the valuation and financial dealings involving the remaining 20 percent of shares.
According to a recent report, the Accountant General has assessed that the value of the 20 percent shares sold by Shrestha should be NPR 36.196 billion.
Additionally, interest and fees amounting to NPR 6.154 billion should be proportionally allocated based on the 80 percent share price.
The report also highlights that Shrestha secured a loan of NPR 20 billion from a foreign company by mortgaging 20 percent of his shares.
It appears Shrestha concealed the details of these foreign loans, presenting misleading information to the industry department and tax authorities to evade taxes.
The Auditor General has pointed out these discrepancies in Shrestha’s financial activities.
Following a reassessment by the Office, Shrestha contested the findings in the Supreme Court. The Court issued an interim order against the tax authorities.
Despite his international residence, he continues to visit Nepal frequently for business. Shrestha, who formally exited Ncell in 2072, has ongoing investments in various sectors within Nepal.
Since then, the Supreme Court has scheduled 30 hearings for the case, which has included various orders and judgments.
The case is now set for a hearing in August.
According to a lawyer familiar with the Ncell case, the Supreme Court recently directed the withdrawal of certain motions.
Currently, 30 different cases related to Ncell are pending in the Supreme Court, with Shrestha’s case being under review for nearly six years.
When questioned about the delays, Supreme Court spokesperson Bedh Prasad Bhattarai explained that case progress has been affected by the automation process and a specific quota for corporate cases.
Furthermore, on page 53 of the Tankamani Sharma Dangal committee’s report, it is noted that an investigation is needed into the price and source of the 20 percent Ncell shares purchased from Upendra Mahato.
The report also calls for an inquiry into the $230 million reportedly received from a foreign company.
Further details and investigations into Niraja Gobinda Shrestha’s Ncell transactions
On page 53 of the report, it is noted that Telia Sonera received $48 million from Sunivera Capital Ventures after Niraj Gobinda Shrestha sold his shares to Sunivera Capital Ventures Pvt Ltd in 2072.
Shrestha, as a Nepali citizen, invested in Ncell and facilitated offshore payments through Sunivera Capital Ventures.
The report indicates that discrepancies in the share transaction details between Shrestha and Sunivera Capital Ventures warrant further investigation.
The two parties reported different prices for the shares, raising questions about the accuracy of the transactions.
In 2077 BS, the Center for Investigative Journalism (CIJ) published material highlighting Shrestha’s offshore dealings aimed at tax evasion in Ncell’s share trading.
The center’s report, referencing Telia’s and Aziata’s annual reports, revealed that NPR 18.61 billion was funneled through a tax haven to acquire shares owned by Upendra Mahato.
Additionally, the Center reported that prior to Sunivera Capital’s purchase of 20 percent of the local shares from Shrestha, Axiata had transferred USD 90 million to an offshore company connected to Bhawana Singh Shrestha.
This information has supported the Auditor General’s findings and the government’s investigation into illegal share trading and tax evasion related to Ncell.
This case highlights the significant financial and regulatory implications of Shrestha’s transactions and underscores the need for continued scrutiny.
The committee led by Tankamani Sharma Dangal has recommended that the government further investigate based on these journalistic reports and assess the Nepali investment in international sectors.
Judgment and investigation into Shrestha’s nationality
Niraj Gobinda Shrestha, who has been residing in Belarus for an extended period, has recently been reported to have obtained permanent residency in Spain.
Despite his international residence, he continues to visit Nepal frequently for business. Shrestha, who formally exited Ncell in 2072, has ongoing investments in various sectors within Nepal.
Shrestha, a founding shareholder in Sanima Bank, recently sold 5.1 million shares of the bank in 2079 BS. According to various sources, he is currently liquidating all his investments in Nepal.
The investigation report reveals significant tax evasion by Shrestha through Ncell share transactions.
Not only did he evade taxes, but he also allegedly violated the Telecommunications Policy, 2060 BS.
This policy mandates that at least 20 percent of ownership in Nepali telecom companies must be held by Nepali individuals or companies.
The report highlights a key issue: Shrestha purchased 20 percent of Ncell shares as a Nepali citizen but sold them as a foreigner.
This discrepancy has led to calls for an investigation into his nationality.
The report on page 54 emphasizes the need to clarify whether Shrestha is a Nepali citizen or a non-resident, noting that non-Nepali citizens are not permitted to invest in Nepal’s telecommunications sector.
According to the 54th annual report of the Auditor General, Shrestha paid capital gains tax on share trading as a non-resident.
The report details that Shrestha, owning 20 percent of Ncell’s shares, reported NPR 11.57 billion in sales and incurred costs of NPR 250 million, resulting in a taxable profit of NPR 11.32 billion.
The capital gains tax owed was NPR 2.83 billion.
Tax expert Dr. Ram Prasad Gyawali endorsed the Auditor General’s concerns, describing the questions about the Ncell share transactions as “genuine.”
He criticized the violation of Nepalese investment regulations in the telecommunications sector.
With shifting political dynamics, it remains uncertain how the investigation into Shrestha—who has maintained close ties with Nepal’s political power centers—will evolve.
Former Auditor General Sukdev Bhattarai Khatri, who prepared the 73rd General Accountant report, confirmed that he included the issue of tax evasion by Shrestha despite considerable pressure from the then Prime Minister and Finance Minister.
Khatri recently learned that this issue was omitted from the latest General Auditor’s report and that detailed documents were concealed.
He suspects that the issue was suppressed due to pressure from top government officials.
Khatri, who resigned and took the matter to the Supreme Court, noted that his efforts resulted in Telia Sonera paying NPR 47.399 billion in capital gains tax following their sale of 80 percent of Ncell’s shares to Axiata.
This case highlights the significant financial and regulatory implications of Shrestha’s transactions and underscores the need for continued scrutiny.
Previous year, four parliamentary committees issued various directives to the government and regulatory bodies concerning Ncell’s share trading issues.
However, the report submitted by Dangal’s leadership has not yet been presented to the parliamentary committees or made public.
While Niraj Gobinda Shrestha’s capital gains tax issue is currently under review by the Supreme Court, the investigation report has recommended further scrutiny of his offshore business and nationality.
Despite the ongoing tax dispute related to Ncell, the former Prime Minister Pushpa Kamal Dahal ‘Prachanda’ led a cabinet decision to appoint Shrestha as a goodwill ambassador for ‘Buddha Darshan and Lumbini, the birthplace of Gautam Buddha.’
With shifting political dynamics, it remains uncertain how the investigation into Shrestha—who has maintained close ties with Nepal’s political power centers—will evolve.
Attempts to reach Shrestha through the Ncell contact number associated with him were unsuccessful; the call was not answered.
Additionally, after informing him of the matter and requesting a response, Shrestha replied that he would be in touch soon, but no further contact has been made.
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