Crime: With full swing investigations on in the Royal Insurance Corporation of Bhutan Ltd. (RICBL) case, initial findings indicate a strong collusion between the insurance company and Bhutan National Bank Ltd. (BNBL) officials.

The Anti-Corruption Commission (ACC) has interrogated about seven persons, most of whom are BNBL officials including a client of the bank in connection with the embezzlement of Nu 91.6M (million) that surfaced in June.

Kuensel also learnt that more people are suspected be have colluded in committing, what now is a clear case of organised crime that occurred over a three-year period.

Besides the persons who were interrogated for several hours, ACC has detained four persons so far, one from RICBL and three BNBL employees. RICBL’s supervisor, a main suspect traced in Nepal more than a month after he absconded was flown to the country on August 1. He is under the Thimphu police custody.

The other main suspect, BNBL’s assistant IT officer was detained on July 30 while an assistant credit officer and a support-staff at the BNBL’s Paro branch office were detained since August 3.

Modus operandi 

RICBL’s Paro branch office maintains their account with BNBL and Bank of Bhutan. The cashier deposits the day’s transaction on the following day. After the daily deposits are done, the amount is updated and reflected accordingly on both BNBL and RICBL’s account. At the end of every month, both the accounts are reconciled at the RICBL head office.

However, in this case, withdrawals and deposits were fabricated and the suspects even got hold of the RICBL cheques on which signatures were forged and the fund withdrawn, indicating a strong collusion between non-cash dealing staffs and those dealing with cash.

Sources told Kuensel that the way the embezzlement occurred was done as if operating a personal account. Over the three-year period, neither did RICBL nor the auditors had access to the original bank statements. The suspects had allegedly colluded to “fudge” bank statements while they had withdrawn from the RICBL account through forged signatures all along.

The suspects had also tampered with RICBL’s original bank accounts making it difficult for auditors to detect the discrepancies. The Royal Audit Authority (RAA) auditors and internal auditors were provided the fabricated bank details.

Kuensel learnt that the RICBL management was not aware of the embezzlement as the bank balance confirmation certificate from BNBL, which is issued at the end of the year for statutory audit, was also fabricated. RICBL’s reconciler who is alleged to have hidden information from the management on the discrepancies resigned soon after the case surfaced. Sources said the ACC had also interrogated him.

Sources also said that the suspects had embezzled the fund through bank transactions using RICBL cheques. However, although obvious that the cheques were forged, no one verified it indicating a strong collusion between RICBL and BNBL employees. Some cheques didn’t even have the authorised person’s name (pay to space in the cheque), but despite that, transactions were done. This happened on several occasions.

How the case surfaced

As the embezzlement occurred over three years since 2013, preliminary estimates showed that about  Nu 47M were siphoned off in 2013, about Nu 37M in 2014 and about Nu 8M as of April this year.

The embezzlement case came to light only after a special audit team was deputed to the Paro branch office on June 10 this year following observations on the supervisor’s luxurious lifestyle. The special audit team was asked to verify the transactions sent to the head office against the bank details during which the discrepancies were found. Kuensel learnt that the RICBL’s internal auditors were asked to verify the bank details from officials beyond the cash counter.

RICBL had also carried out an internal audit in 2013 and 2014 after receiving frequent complaints but the discrepancies could not be traced. The same happened with BNBL.

Kinga Dema