Corruption: In continuation to the ongoing investigations, the Anti-corruption Commission (ACC) has suspended one more business, Chotey Lal Shah grocery in Phuentsholing after finding a prima facie case of corruption.
The commission has now suspended nine business establishments in the town.
A non-national owned the license of Chotey Lal Shah grocery shop. However, Kuensel learnt that another Indian operated the business.
The commission also shut and sealed doors of Rabten Roadways, a clearing agent, which also functioned as forwarding and a shipping agent on May 8. T Phuentsho enterprise, a hardware shop, was another business ACC sealed last Friday.
As of Friday (May 8) night, the sealing on the Shah & Sons were removed, however, Kuensel couldn’t confirm if it was allowed to open.
Other shops that are currently shut for investigation are Ramasis Prasad, Tshelrup enterprise, and Jatan Prasad Lal Chand Prasad (JPLP) departmental store.
From the four customs officials initially held in custody for interrogation, three were released. These three officials were suspended from their service. However, their suspension was revoked later.
The commission’s team has been suspending business licenses and closing shops for investigation into business firms in the town in relation to alleged tax evasion through corrupt practices. One was for under-declaring of goods imported. Over-declaring, at one hand led to alleged corruption scheme of INR diversion.
Sources say Indian rupee (INR) used to get diverted through manipulated and false invoices with regards to 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).
In case of the husked (brown) rice, figures with Bhutan Trade Statistics (BTS) show a staggering import of 44,975.30 metric tonnes (MT) worth Nu 1.1 billion (B) in 2014. This is an increase from 600kg, worth Nu 23,600 in 2010, which is exceptionally low.
Although the import of husked (brown) rice is also including figures from other entry points such as Gelephu, Samtse, and Samdrupjongkhar, the increase in just four years is alarming, say some businessmen in the town. The increase came in the aftermath of the Rupee crisis that started in 2011, many shared.
In 2011, the country had imported about 1.09MT of husked (brown) rice worth Nu 17,440. The import figure climbed to 43,045.86MT worth Nu 800.64 million (M) in 2012.
In 2013, the country imported 46,438MT of husked (brown) rice worth Nu 1.06B.
Import figure of corrugated galvanised iron (CGI) sheets, meanwhile, is another product that is being questionable. Despite the fall of housing construction following the Rupee crisis in 2011, the country still imported 8,327.43MT of CGI sheets worth Nu 591.99M in 2012.
In between 2010 and 2014, BTS figures show highest CGI import in 2012, which, many say was surprising because financial institutions didn’t allow loan for house construction after the rupee crunch.
When the housing and construction was at its boom in 2010, Bhutan had imported 6,433.51MT of CGI sheets worth Nu 394.98M. In 2011, the import dropped drastically to 100kg.
Meanwhile, many people in Phuentsholing say all corrupt practices happening today were a result of fronting. The Bhutan Chamber for Commerce and Industry representative for the business community in Phuentsholing, Phuntsho Wangdi said following the rupee crisis, rupee value increased, which eventually led to illegal selling of INR.
“Non-taxable items then became blessing in disguise for many fronting businesses,” he said, agreeing fronting was the source of all corrupt practice in Phuentsholing. “Government has been lenient despite the business community raised the issue many times.”
The business group had also provided to economic affairs ministry the list of 135 cases business entities with fronting in Phuentsholing.
Illegal selling of products imported from third countries is another issue fronting has crafted. This is also one aspect of alleged corruption in the case of Jatan Prasad Lal Chand Prasad (JPLP) departmental store.
JPLP, owned by an Indian has a legal Bhutanese license, and selling of third country goods was visible when the shop was open. However, only Bhutanese can import third country goods.
Since the investigation started on April 20, ACC has also issued freeze notice on properties of four individuals.
Rajesh Rai, Phuentsholing