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Supreme Court orders Basnet back into custody

Supreme Court today ruled that promoter of Oriental Cooperative Sudhir Basnet should be kept in custody.

A division bench of justices Girish Chandra Lal and Devendra Gopal Shrestha handed down the verdict today overturning the Patan Appellate Court’s earlier decision to release the disgraced property businessman.

The Appellate Court – in August 2013 – had upheld the decision of the Kathmandu District Court to release Basnet on bail.

Judge Bhoj Raj Adhikari of Kathmandu District Court had released Basnet on bail of Rs 600,000, and Rs 400,000 for a case related to alleged fraud of Rs 80 million and Rs 200,000 for another charge related to a Rs 40-million fraud.

The police was forced to arrest Basnet after he failed to pay interest on bank loans, repay depositors of Oriental Cooperative and ensure availability of apartments, which had been booked in his housing projects.

The depositors of the Oriental Cooperatives have claimed that he failed to repay their deposits. Basnet had been under mounting pressure from Oriental’s depositor to pay back their money.

Basnet used the deposits of Oriental Cooperatives in his around a dozen housing projects, which is against the norms of cooperatives.

Likewise, he was also under pressure by home buyers after he failed to deliver the houses to customers on time. He tried to pacify the depositors with cheques, that were bounced, which is a criminal case, according to the law. After his repeated failure to clear his liabilities, the prosecutor had filed a case against him.

The government formed a high-level probe panel – some eight months ago – to investigate on cooperatives related frauds. The committed was flooded with a large number complaints, specially against Basnet.

The committee led by former chairman of the Special Court Gauri Bahadur Karki received 12,778 complaints against troubled cooperatives. Of the total some 11,286 were against Oriental Cooperatives.

Of the more than Rs 9.63 billion liabilities of 130 troubled cooperatives, Oriental alone has liabilities worth more than Rs 6 billion, according to the committee. The panel reported that Basnet owes Rs 5.50 billion to Oriental’s depositors.

He has also been charged with misappropriating Rs 1.36 billion collected from booking od houses and apartments in his projects.