PM asked the OAG to investigate into the alleged loan scam
The Office of the Attorney General’s (OAG) investigation into the alleged loan scam in Tsirang found that the two People’s Democratic Party (PDP) workers violated trade rules in offering their services to obtain loans from REDCL.
The promoters did not hold license to sell their services that infracted the administrative requirements under the Rules and Regulations for Establishment and Operation of Industrial and Commercial Ventures in Bhutan 1995 (RREOI and CVB).
In 2016, two PDP dzongkhag coordinators of Dagana and Tsirang, Gopal Waiba Lama and RD Subha, called for applications to form an Integrated Farming and Food Processing Project in the dzongkhag. But their attempts to establish the cooperatives and the bank failed.
Attorney General Shera Lhundup, who led the investigation, wrote to the economic affairs minister Lekey Dorji on February 12 asking him to instruct the trade department to direct the two promoters of a cooperative in Tsirang and Dagana to return the fees collected from the applicants.
The two promoters are asked to return the forms and other enclosed documents to each applicant, through respective gewog administrations.
The OAG also established that the duo pay fine for violating rule one of RREOI and CVB.
The OAG team determined that although no penal law was breached, Gopal Waiba Lama and RD Subha operated commercial activities in availing their services to the applicants at a certain fee without trade license.
The rule states, “An individual or company/firm may engage in commercial or industrial activity only after obtaining a license for the purpose from the ministry. Exceptions to this rule shall be made only in the case of small cottage industries established in rural areas with an investment of less than Nu 100,000. Violation of the rule shall result in payment of a fine of Nu 2,000 and immediate closure of the activity.”
The above requirement is grounded on the fact that Gopal Waiba Lama and RD Subha are under the obligation to perform their part of the agreement terms with the applicants.
However, if the promoters don’t refund the fees, the applicants may file civil suit for recovery of the fees paid and or other claims they may prefer under the Contract Act 2013, the AG’s letter stated.
OAG, like the Anti-Corruption Commission and REDCL, concluded that it did not operate as a fake REDCL office.
The team also found no element of commercial bribery, embezzlement, impersonation and collusion with the government agencies or swindling people as alleged.
The OAG team, led by the Attorney General visited Tsirang last month and met the two promoters, 227 complainants from 11 gewogs, and two national assembly serving MPs from the dzongkhag.
Two PDP dzongkhag coordinators of Dagana and Tsirang, Gopal Waiba Lama and RD Subha, called for applications to form an Integrated Farming and Food Processing Project in the dzongkhags. They operated from the PDP office in Tsirang, which was partly funded by RD Subha as he used the office for his construction management office for Ms Yarpharla Construction, the OAG report stated.
The report states that the objective of the project was to create cooperatives for organic fertiliser, RNR and livestock feeds, and rural banking. People were informed that they could apply for low interest loans up to Nu 500,000 from REDCL. The two employed assistants to help farmers with the forms.
Gopal Waiba Lama submitted the proposals to establish an integrated agro food park and a farmers’ cooperative bank. Royal Monetary Authority rejected the proposal in want of legal framework. The agriculture marketing and cooperatives department did not accept the cooperative proposals due to procedural deviances from the Cooperatives Act and its regulations, the OAG report stated.
Kuensel reported that a total of 73 groups, comprising of 407 farmers, became members of the ‘Agro-cooperative’.
The report states, “consequently the promoters helplessly evaded from responding to the repeated calls of the applicants and the office remained locked with no one to answer queries of the applicants. It’s over a year since the forms were taken by the two promoters, yet the applicants neither got loan nor an explanation as to why things got held up until now which made the applicants let down.”
The two men told the OAG that they are still exploring ways to process the loans for the applicants.
“All applicants concur that the promoters should have at least come and explained why they couldn’t fulfill their promise of availing loans for them or register as cooperatives,” the report stated.
The issue resurfaced when farmers complained to Opposition Leader Pema Gyamtsho (PhD) during his gewog visits to Tsirang, about two PDP workers’ involvement in an alleged loan scam. The OL wrote to ACC on January 4 to investigate the case.
Prime Minister Tshering Tobgay on January 5, wrote to the Attorney General asking his office to legally vet thoroughly the allegations made and directed OAG to initiate prosecutorial due process if any person is found to have breached any provision of law without brining the matter to the his notice.
The Anti-Corruption Commission (ACC) also investigated the case in May 2017. ACC dropped its investigation last year, as the matter did not merit further investigation.