One more customs officer detained, one more business license suspended

ACC: In its ongoing investigation, the Anti Corruption Commission (ACC) detained one more customs official and suspended another business license in Phuentsholing this week.

ACC investigators detained the customs officer on June 14, making him the fifth customs official to be interrogated and detained since April 20, in connection with the alleged customs maladministration, entrenched corruption in the fraudulent import and deflection of goods, under invoicing and wrongful declaration of goods, tax evasion and repatriation of INR (Indian rupee).

However, four customs officials and several accomplices, who were detained in April and May, were released on bail.  An ACC official said the investigation of a young customs inspector, who was detained for more than a month and released last month, was completed and forwarded to the Office of the Attorney General for prosecution.  He was reportedly charged with official misconduct, bribery and owning disproportionate assets.

On June 12, the commission also suspended the business license of IS Enterprise, after finding a prima facie case of corruption.  The commission has now suspended 12 business establishments in town and frozen properties of four individuals.

Meanwhile, the commission has also issued a “show cause notice” to some of the establishments that were closed and suspended from operation.

The commission has asked the rightful license holders of those establishments to explain why the commission should not revoke their licenses.  Should the license holders fail to produce such an explanation latest by tomorrow, the commission will pursue “appropriate recourse,” the notice states.

In the notice issued, the commission has pointed out and confirmed that non-Bhutanese from across the bordering town of Jaigaon operate the businesses, while Bhutanese nationals owned the licenses.  Kuensel learned of a case where a Bhutanese had more than two licenses operated by non-Bhutanese.

The show cause notice also stated that the original license holders were paid monthly instalments as commission, which ascertained a prima facie evidence of fronting.

As most cases are related to fronting and with only a day left to respond, locals say some establishments could get their licenses cancelled.  If the license holders do not submit “convincing reasons,” the commission has made it clear that it would still pursue appropriate recourse.

The business committee’s representative in Phuentsholing, Phuntsho Wangdi said, fronting is a major issue that relevant agencies should have tackled a long time ago.

“I’ve been raising this issue for a long time now,” he said, adding that fronting had eaten into opportunities that Bhutanese could have gained from. “Fronting has affected the already existing businesses too.”

Phuntsho Wangdi also said that the number of such practices that has come under ACC scanner was still less. “There are more than 100 cases in the town,” he said.

The matter had been raised with several government agencies, including the cabinet and economic affairs ministry, he said.

“But, I couldn’t get any support,” the representative said. “What ACC is doing can deter many from such practice.”

Fronting, locals also say is also one of the major contributors to the housing shortage in Phuentsholing.  House owners have given their rooms as stores for shops run by non-nationals with Bhutanese licenses.

Meanwhile, the commission has given time to the four establishments run by non-Bhutanese holding legal business licenses in the town, whose operations were also closed, to lift or sell off their remaining stock.

However, all shops will remain closed and business licenses suspended until the legal proceedings are completed, according to ACC officials.

“The remaining stocks are zero tax commodities and we allowed them to sell their stocks within the country, which will be monitored by the ACC,” an official said. “But they can’t re-export to India.”

Chotey Lal Shah, Shah & Sons, Ramasis, Ramprit, Jatan Prasad Lal Chand Prasad (JPLP) are the business entities owned by non-Bhutanese in Phuentsholing with legal licenses.

By Rajesh Rai in Phuentsholing and Rinzin Wangchuk in Thimphu