KATHMANDU, June 23: The Department of Money Laundering Investigation (DoMLI) and the Central Investigation Bureau (CIB) of Nepal Police have stepped up efforts to investigate brokerage firms with an average daily turnover of more than Rs 300 million.
According to an official at the Securities Board of Nepal (SEBON), the two government investigative agencies have also asked SEBON for details of large investors who trade shares through the specified brokerage firms.
Recently, the Financial Action Task Force (FATF) decided to keep Nepal on its grey list for an additional six months. Amid growing pressure to implement corrective measures and prevent the country from remaining on the grey list, the government has initiated this move through its investigative agencies.
Nepal receives monthly remittances averaging over Rs 100 billio...
Identifying six key areas for improvement, the intergovernmental body has asked Nepal to significantly increase both the number and effectiveness of money-laundering investigations and prosecutions. FATF has stressed the need for stronger mechanisms to identify, trace, freeze, seize and confiscate criminal proceeds and assets used in criminal activities, in line with the country's risk profile.
Earlier, the alleged mastermind behind the country's biggest financial scam, Deepak Bhatta, along with 39 individuals and several companies, was found to have misappropriated funds through a stockbroker. The case involves complex patterns of alleged share-price manipulation, misuse of insurance funds, routing of money through brokerage firms, concealment of beneficial ownership through corporate structures, and layering of transactions to disguise illicit funds as legitimate assets.
Investors, however, have expressed concern over the government's move, saying it could further undermine investor confidence at a time when the country's only stock market has been on a downward trend. This week, the stock market declined for a fourth consecutive trading day on Thursday, while daily turnover also fell significantly to Rs 2.83 billion.
Over the past month, the market has shed 135 points, with the NEPSE index falling to 2,786 points. Over the past five years, the benchmark index has declined by 17 percent, while trading volume has shrunk by 80 percent from its peak.
