The parliamentary special probe committee investigating crisis-ridden cooperatives has found Rabi Lamichhane, chairman of the Rastriya Swatantra Party (RSP), involved in misusing millions of rupees from cooperatives during his tenure as managing director of the defunct Gorkha Media Network.

The committee’s report, submitted to Speaker Devraj Ghimire, recommends that the government take legal action against Lamichhane, who is a former deputy prime minister and home minister.

Lamichhane is accused of diverting funds from multiple cooperatives to finance the Gorkha Media Network, which ran the Galaxy 4K Television channel before ceasing operations last year.

The media company was co-founded by Lamichhane and chairman Gitendra Babu (GB) Rai. Lamichhane was involved in running the company before he entered politics in June 2022.

Ishwari Devi Neupane, a Nepali Congress member of the probe committee, stated, “During our investigation, we found that the investment in the Gorkha Media Network had been made with the money diverted from various cooperatives.”

Although Lamichhane was found guilty of using cooperative funds for the media network, the report could not directly link him to the actual rerouting of these funds.

Lamichhane has continuously denied having anything to do with cooperative funds misappropriation. However, the report details that Rs650 million from five credit cooperatives were diverted to Gorkha Media Network.

The cooperatives involved included Surya Darshan Cooperative (Pokhara), Supreme Cooperatives (Butwal), Sahara Cooperatives (Chitwan), Sano Paila Cooperatives (Birgunj), and Swarnalaxmi Cooperatives (Kathmandu).

The parliamentary special committee has recommended prosecuting four individuals: Lamichhane, GB Rai, board member Kumar Ramtel, and initial founder Chhabi Lal Joshi.

The chair of the probe panel, Surya Thapa stated “Those in the roles of shareholders, board members, and managing director can’t evade accountability and liability for the money that comes into the company.”

The report emphasizes that individuals responsible for the bank accounts must be accountable for how the money is used, recommending prosecution based on their roles.

An Interpol diffusion notice has been issued for GB Rai, who is believed to be abroad and on the run. Kumar Ramtel is currently in judicial custody.

The committee’s report also advises the government to establish binding legal arrangements for share purchases and sales to prevent further issues.

It suggests making proper legal arrangements concerning sweat shares and prompting relevant agencies to address these matters.

Lamichhane claimed to hold 15 percent of sweat shares, which he said he sold after completing all legal procedures. However, the committee found these claims to be false.

“Forgery was involved in the purchase and sale of sweat shares,” said Lekhnath Dahal, a CPN (Maoist Centre) lawmaker and committee member.

The report indicates that forged documents were used while transferring the company’s shares and recommends further investigation by the government.

RSP leaders, including Lamichhane and Vice-chair Swarnim Wagle, claimed that the committee acquitted Lamichhane of embezzlement allegations, interpreting the report as exonerating him.

They argued that the report confirms the diversion of cooperative funds to the media company but did not directly implicate Lamichhane in the misappropriation.

The acting spokesperson of the RSP, Manish Jha said, “Even Congress General Secretary Gagan Thapa had claimed that Lamichhane was directly involved in diverting cooperative funds.”

Jha stated that the report disproves such accusations and acknowledged that the diversion of funds was confirmed but not directly linked to Lamichhane.

Committee member Dhruba Bahadur Pradhan disagreed with the RSP leaders' interpretation, stating that Lamichhane’s non-direct involvement does not mean he was free of responsibility.

Pradhan emphasized, “Our law does not permit the rerouting of the cooperative funds to a private company, yet Lamichhane and the company did exactly that.”

Legal experts suggest that Lamichhane could face prosecution under multiple laws, including the Cooperative Act, the National Penal Code, the Organised Crime Prevention Act, and the Prevention of Money Laundering Act.

The committee was established on May 28 with a four-point mandate to investigate cooperative funds embezzlement, including the funds linked to Gorkha Media Network.

Although the committee initially had three months to complete its work, it was granted a 15-day extension, with the report submitted before the new deadline.

Speaker Devraj Ghimire has forwarded the report to the government for implementation following its submission to the House of Representatives on Monday.

The committee was formed after the Nepali Congress, along with the RPP, obstructed House meetings demanding a probe into the cooperative embezzlement involving Lamichhane.

The then ruling parties, including CPN (Maoist Centre), UML, and Lamichhane’s RSP, opposed the demand for a special probe committee.

Lamichhane, who founded the RSP in June 2022, is also involved in other controversies, including issues related to dual citizenship and his eligibility to contest elections.

He was stripped of his position as a lawmaker and minister in early 2023 due to issues with his Nepali citizenship, but was re-elected in a by-election held later in the same year.

The probe committee has also recommended investigating Jyoti Gurung, former wife of Nepali Congress Vice President Dhan Raj Gurung, for mishandling Miteri Cooperative’s funds.

The committee’s investigation did not find evidence implicating Dhan Raj Gurung but recommended further inquiry into the handling of cooperative funds by Jyoti Gurung.