ACC recommends for criminal charges OAG files civil restitution case

Corruption: The Office of the Attorney General (OAG) has filed a civil suit against 23 business entities in connection with the ‘fronting’ of trade licenses before the Phuentsholing dungkhag court yesterday.

In addition to fine and license cancellations, the state prosecuting agency also filed for the restitution of wrongful gains made by license holders in commissions and the INR interest incurred by the state at that time due to wrongful use of the licenses.

The total amount of commission to be restituted comes to Nu 8.436 million (M) and deflection of Indian Rupee (INR) amounts to INR 242.17M. The INR interest was calculated at 9.75 percent.

The license users were mostly non-Bhutanese who were involved in leasing licenses to another party to run the businesses in Phuentsholing. Except Chotey Lal Sha Grocery, the rest of the trade license holders are Bhutanese.

The restitution of wrongful gains made by 29 license holders as commission range from Nu 60,000 to Nu 1.1M.  Of the total Nu 8.436M, Rabten Roadways, which was run by Kumar Chanchal Daga, alone has to refund Nu 1.1M.

Druk Norlha Enterprise, Druk Norlha Company and Norlha Beer Agent run by Rajiv Bhansali have to restitute Nu 1.408M.

The OAG also asked Yeshey Pema Enterprise, Sonam Beer Agency, Norzang Trading and Rigsom Enterprise to restitute the money they received in commission. All these business were run by Indians.

DP Tshongkhang, Rigsom Enterprise, Burmi Enterprise, Yeshey Pema Enterprise, Druk Norlha, Tenzin Enterprise, Nozang Trading and Yangkhor Enterpise will have to refund INR 242.17M. DP Tshongkhang operated by Vasu Dev alone was asked to refund INR 59.631M followed by Rigsom Enterprise with INR 39.366M, Burmi Enterprise run by Sanjay Gupta with INR 27.52M.

The OAG also wrote to the Anti Corruption Commission (ACC) reasoning why they had to file as a civil restitution case and not a criminal case of commercial bribery as ACC report suggested.

In his letter to the ACC chairperson, Attorney Geneal Shera Lhundup stated that OAG took cognizance of certain elements of “commercial bribery” present in the commission of fronting.

“However, the ACC Act does not define the term “fronting” to fulfill the law enactment due process of notifying public of that applicability which, in turn, constitutes a legitimate defense for an accused under Section 77(a) of the Penal Code,” the letter stated. “Further, the ACC Act of 2011 neither makes reference to “fronting” as constituting a criminal offence nor it repealed any of the cited rules and procedure, by reference or implicit.”

As of now, ACC forwarded 29 investigation reports of fronting of trade licenses. OAG officials said that they conducted a thorough review on the facts of each referred case, precedence set by the Ministry of Economic Affairs for the last 27 years, and applicability of laws.

After considering commercial activity situations in the Samdrupjongkhar, Gelephu and Phuentsholing towns, the government determined the need to take appropriate measures to protect Bhutanese traders, who were becoming vulnerable to be locked-out or displaced from the mainstream of commercial undertakings, due to increasing unfair competitions being put up by non-national business personnel who were running various natures of businesses within Bhutan by means of using trade licenses owned by Bhutanese on payment of commissions.

The trade rules and regulations of 1988 and 1995 prohibits a trade license from being “sold, leased, converted or transferred to any other persons.

As of July 2015, the implementing authority found 346 violations and imposed administrative penalties. The last eight violations were recorded on July 1, 2015 in Samdrupjongkhar.

The Attorney General also stated that the importance of concerted efforts to contain and eliminate corruptive practices for the greater well being of the nation cannot be denied.  “We cannot deny the requirement of the state to mete out equal treatment of liability for the same offence. Hence, selective prosecution of individuals, especially in the present fronting cases, is in itself aberration from the precedents set hitherto and constitutional norms”.

ACC officials refused to comment on the case saying that the commission hasn’t received the OAG letter.

Rinzin Wangchuk