ACC investigation deepens into nexus of fraudulent practices

More than 800 people, including some senior officials, were interrogated, and 34 detained in Phuentsholing since April 20

Corruption: After the completion of investigation on entrenched corruption involving raiding and closing of shops in Phuentsholing, the Anti-Corruption Commission’s focus is now on the nexus of fraudulent practices.

In the first phase of investigation that began on April 20, the commission unearthed several fraudulent practices in Phuentsholing, which the ACC now has called the hub of corruption.

The ACC over the past four months’ probe has discovered many fronting cases that according to the Anti-Corruption Act of Bhutan 2011 are considered commercial fraud or bribery.

The commission has uncovered fraudulent tax evasion methods that led to revenue loss for the government in millions. Taxes were evaded through forging customs documents in collusion with clearing agents, fraudulent import and deflection of goods and wrongful declaration of goods, among others.

The commission has found that Bhutan has been losing millions of Rupee by faking imports of zero-tax commodities, manipulation of imports, illegal transaction of currency and using Automated Teller Machine (ATM) cards.

The anti-graft officials have found that some non-Bhutanese conniving with Bhutanese clearing agents have forged and tampered Bhutanese customs documents and repatriated millions of Indian Rupee through real time gross settlement (RTGS), demand draft (DD), and telegraph transfer (TT).

The commission has interrogated more than 800 people, including some senior officials, in connection with the commercial bribery and transaction. About 34 people, including 19 non-Bhutanese were detained for interrogation. Two non-Bhutanese and a Bhutanese are still under detention. A Bhutanese businessperson has been detained for deflection of goods imported from third country.

ACC has also suspended more than 50 business licences and closed about 20 shops after prima facie evidence of corruption. On September 3, the commission suspended four business licences – Lhayang Enterprise, Yu Dem Enterprise, Tama beer agency, and Tama enterprise. The suspension will remain effective unless otherwise cancelled by the commission or until the completion of the legal proceedings and adjudication by the court, whichever comes earlier.

The commission is looking into the possible collusion of bank, trade, revenue and customs officials with the importers and illegal transactions of currency. The commission has begun interrogating Bhutanese ATM cardholders after it uncovered a racket of ATM cards being used to divert more than INR 2.86 million every month from Bhutan since 2013.

As on September 2, the commission has interrogated more than 20 ATM cardholders.

ACC on August 20 detained Sanjeev Kumar Gupta, 32, in connection with possession of 286 Bhutanese ATM cards. Sanjeev Kumar Gupta admitted to using the ATM cards to withdraw Rupee from Jaigaon. He then sold the Rupee at 7.5 to 8 percent above the exchange rate and paid five percent commission to ATM cardholders. His monthly transaction amounted to 2.86 million Rupees with a monthly income of 0.3 million Rupees.

ACC officials said that the 20 ATM cardholders had taken out 9.9 million Rupees. The Bhutanese account holders will be charged for aiding and abetting the crime.

Fronting businesses and ATM cardholders who lent their cards to non-Bhutanese will be implicated for active and passive commercial bribery.

According to section 66 of ACC Act 2011, any person who, in the course of economic, financial or commercial activities, promises, offers or gives, directly or indirectly, of an advantage to any person who directs or works, in any capacity, for a private sector entity, for the person himself or herself or for another person, in order that he or she, in breach of his or her duties, act or refrain from acting shall be guilty of an offence.

The section 67 also says that a person who directs or works, in any capacity, for a private sector entity, in the course of economic, financial or commercial activities, solicits or accepts, directly or indirectly, of an advantage, for the person himself or herself or for another person, in order that he or she, in breach of his or her duties, act or refrain from acting, shall be guilty of an offence.

The commission is also investigating individuals who are in possession of as many as 23 business licences.

The ACC’s third phase investigation will wind up soon. In the fourth phase, the commission will facilitate streamlining and correcting systems at the regional revenue and customs, and regional trade and industry offices.

“Basically, we will be focusing on rebuilding the system,” said an ACC official. The investigation is expected to last until December.

Businesspersons in Phuentsholing said that ACC has done a good job, but what is more important is that the commission should make sure that such incidences do not occur in the future.

Rinzin Wangchuk,  Phuentsholing

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