ACC: In continuation to its ongoing investigation, the Anti-Corruption Commission (ACC) has suspended licenses of two businesses, Yeshey Pema Tyres and Yeshey Pema Enterprise after finding a prima facie (based on impression) case of corruption.

As the name suggests, both enterprises are owned by the same individual.

Including these two establishments, the commission now has suspended about 16 business entities in the border town after finding prima facie case of corruption.

The commission has also recently closed seven more business entities in Phuentsholing. Druk Tyres Services (DTS), Bhutan Steel Center, YP Winery, Brumi Enterprises, and Sa-Tsam Enterprise are other establishments the commission has recently sealed to further the investigation.

So far, the commission has closed about 20 shops in connection to alleged corrupt practices in Phuentsholing.

Although commission officials did not comment, Kuensel learned from sources that the owner of Kenpa Private Limited (KPL), which the commission also had sealed for further investigation, owned Druk Tyres.

KPL is a licensed oil manufacturing and packaging company based in Pasakha. The establishment manufactures and packs imported oil and sells in the market.  Since the commission’s investigation started, some said the production has stopped. However, Kenpa’s product Natural (Lite) oil is still sold in the market but many grocery shops do not have the oil, Kuensel found.

Kenpa and Druk Tyres must have been closed due to fronting, businessmen in Phuentsholing said. While the tyre-servicing firm was operated by a renowned businessman from Jaigaon, the oil manufacturing company is associated with the JPLP departmental store, which the commission closed in April this year.

Tyres are taxed higher in India than in Bhutan leaving room for malpractices and collusion between Bhutanese and Jaigaon businesses. Local businesses accuse that tyres are imported under Bhutanese business license but never entered the country as it was diverted to Jaigaon.

According to the Bhutan Trade Statistics (BST), Bhutan imported 66,931 metric tonnes (MT) of tyres (for motorcars, including station wagons and racing cars) worth Nu 195.18 million in 2014. In 2010, the country imported 34,768MT tyres worth Nu 81.93 million.

ACC team has been suspending business licenses and closing shops for investigation for alleged tax evasion through corrupt practices, one being under-declaring of goods imported. Over-declaring, at one hand led to alleged corruption scheme of INR diversion.

Indian rupee (INR) was reportedly diverted through manipulated and false invoices on non-taxable essential items such as rice, oil, and sugar. A business entity generally would declare import at customs and ask for INR in banks in the form of demand drafts (DD) and Real-time Gross Settlement (RTGS).

Meanwhile, the Bhutanese license holders who gave their licenses to non-Bhutanese were given a show cause notice in June and the non-Bhutanese who owned legal Bhutanese licenses were asked to lift their goods.

Since the investigation has started in April 20, 2015, ACC also has frozen properties of four individuals.

By Rajesh Rai, Phuentsholing