When a figure who once stirred the hopes of Nepal’s anti-establishment voters finds himself behind bars on charges of cooperative fraud and money laundering, it incites an ugly question: is this the downfall of a populist hero or simply justice catching up with a convenient scapegoat? Rabi Lamichhane, president of the Rastriya Swatantra Party and a suspended member of parliament, has become the unlikely focal point of the country’s most high-profile financial scandal.
On a brisk Friday the Supreme Court declined to release Lamichhane from custody. His detention relates primarily to the now-defunct Gorkha Media Network, a company he co-founded and ran before his political debut in June 2022. The court’s verdict left little room for ambiguity: “Based on the immediately available evidence, it could not be reasonably believed that the defendants were innocent.” The statement set the tone for Lamichhane’s continuing legal odyssey.
Lamichhane’s political ascent was fast and charismatic. The RSP emerged as the fourth-largest party in the 2022 federal elections, harnessing popular disillusionment with the traditional political elite. Yet the very qualities that propelled him into the limelight—his media savvy and anti-corruption rhetoric—now serve as the backdrop to his alleged misdeeds.
Central to the accusations is the embezzlement of a staggering NPR 109.9m (around $900,000) siphoned from various cooperatives into the accounts of Gorkha Media. Lamichhane, along with Chhabilal Joshi, a former Deputy Inspector General of Nepal Police and fellow accused, and GB Rai, the media company’s chairman, are charged with orchestrating this fraudulent scheme. The cooperative funds, originally pooled for community development and small-scale loans, appear to have been diverted for private gain—a violation of law and trust.
Whereas Lamichhane claims Joshi invested only NPR 5–12 million, the audit reports show a far less flattering picture. The disparity between claim and evidence is the gaping fault line on which the prosecution’s case rests. Multiple cooperatives across the country have filed separate cases: with Lamichhane having secured bail in four instances.
Lamichhane’s suspension from parliament last year triggered a constitutional tussle. The RSP initially resisted his suspension, arguing elected representatives should not be suspended based merely on charges. Legal experts are divided. Some contest elected MPs fall outside the ambit of “public servants” under Nepali statutes. Others counter anti-corruption laws explicitly encompass elected officials to prevent legal loopholes being exploited. The RSP meanwhile appointed Dol Prasad Aryal as acting president, leaving no illusion about who still pulls the strings. His nomination over the older vice-president—Swarnim Wagle—signals the influence Lamichhane wields, even from behind bars.
The scale of the alleged fraud is gut-wrenching. The Parliamentary Special Probe Committee reported NPR 63 billion (about $520 million) embezzled nationwide from cooperative funds. Of that Everest sum, Lamichhane’s involvement in nearly NPR 1 billion funnelled into Gorkha Media Network is the linchpin of the prosecution’s case.
Specific loan disbursements illustrate the scheme’s complexity. Cooperatives, bound by law to loan only inside their jurisdictions, allegedly issued loans to entities and individuals outside their remit. Companies linked to GB Rai like Nature Hub International and Spring Wood Real Estate received millions in loans. Suspicious loans were extended to individuals including members of Lamichhane’s extended circle.
Lamichhane’s arrest was no simple affair. In October his detention at the RSP office was carefully planned. He was then kicked to Rupandehi jail. His time in custody was extended several times under laws dealing with organised crime and money laundering. Showing how seriously the authorities are handling the case. The judicial process is ongoing. Lamichhane faces the risk of up to 15 years in prison, alongside possible recovery of funds in the hundreds of millions of rupees.
The public reaction is predictably splintered. Supporters see a witch-hunt against a reformist voice. Critics argue the case epitomises the dangers of mixing populism with unchecked ambition. The RSP decries the charges as politically motivated, but dismissed by senior legal figures who cite sufficient evidence for prosecution and highlight Lamichhane’s own abuse of ministerial power to evade earlier arrests.
Lamichhane’s fall is not an isolated saga—but a reflection of broader systemic fragilities. The cooperative sector, a vital source of rural credit and social development, suffers chronic governance weaknesses.. The scandal exposes how loosely regulated financial institutions become conduits for political financing and personal enrichment.
As Lamichhane awaits trial the implications transcend one man’s fate. The cooperative fraud scandal has stripped away the veneer of populist promise, exposing a tangle of financial mismanagement and institutional failure. Whether Lamichhane is ultimately convicted or exonerated, the case is a turning point in reckoning with corruption and governance.
A man who once vowed to cleanse the political system now finds himself its most conspicuous stain. The slow wheels of justice grind on, and in their wake, they leave a country confronting the brutal truth: that the new Nepali dream is still very much a work in progress. ■
