The Central Investigation Bureau (CIB) of the Nepal Police has recommended issuing an Interpol red notice against two people in connection with embezzlement of funds in the Lalitpur-based Miteri Saving and Credit Cooperative Society Limited.

Although the cooperative had filed a complaint against five people, the CIB recommended that the Nepal Police Headquarters issue a red notice against Jyoti Gurung and Jyoti Bahadur Bhandari. Jyoti Gurung is the former wife of Nepali Congress Vice-president Dhanraj Gurung and has reportedly fled the country.

But Miteri Cooperative Chairman Kumbharaj Gurung claims that although he tried to register a complaint against six people, including Dhanraj Gurung, the police refused to accept a complaint against him.

Nepal Police spokesperson Dan Bahadur Karki confirmed that the CIB has recommended that the Police Headquarters issue a red notice against Jyoti Gurung and Bhandari.

“A recommendation for the red notice has reached the police headquarters, and we are processing it,” Karki told the Post. “There is a process to follow before we correspond with the Interpol headquarters for a red notice to be issued against an individual.”

Karki said that the Interpol headquarters does not accept every request for a red notice. Red notices are issued for fugitives wanted either for prosecution or to serve a sentence for serious ordinary-law crimes such as murder, rape, and fraud.

“Before we request Interpol to issue a red notice, we have to follow the due process to strengthen our case,” Karki said.

When the CIB recommended that the Nepal Police headquarters correspond with Interpol to issue a red notice against Gurung and Bhandari, who are accused of misappropriating the money of the Miteri cooperative, the bureau also began an investigation into the alleged fraud.

CIB spokesman Hobindra Bogati said they are thoroughly reviewing the complaint about Miteri Cooperative. But he said completing the investigation would take time.

“We are investigating the complaint about Miteri Cooperative where Dhanraj Gurung and his former wife are allegedly involved,” Bogati told the Post.

After the cooperative’s chairman, Kumbharaj Gurung, filed a complaint with the Department of Cooperatives in August, alleging that Jyoti Gurung, the general manager, embezzled millions of rupees from the cooperative, Congress Vice President Gurung also came under scrutiny.

Miteri Cooperative is an organisation started by retired servicemen from the British and Indian armies. Congress leader Gurung’s former wife, Jyoti, joined this cooperative as a clerk on May 25, 2000. Within two months, she was promoted to accountant and later became the general manager in 2018.

After becoming the general manager, Jyoti transferred the cooperative's funds to Jyoti Bahadur Bhandari. Initially, Jyoti withdrew Rs3 million from the cooperative and provided Bhandari a loan for a week, but Bhandari returned it by adding half a million rupees.

Then Bhandari took out a second tranche of loan, this time worth Rs 4 million. This time Bhandari returned the money next week by adding Rs1 million. Jyoti allegedly profited by misusing the co-operative’s funds to lend at exorbitant rates. In this practice known as ‘meter byaj’, interest is calculated on a weekly basis.

Later, when Bhandari ran away with the money given by Jyoti Gurung, Congress leader Dhanraj Gurung was accused of suspiciously divorcing his wife.

The chairman of the Miteri cooperative, Khumbharaj Gurung, also claims that despite their alleged divorce, Dhanraj Gurung had taken out a loan from the cooperative, with Jyoti Gurung as witness.

“Dhanraj Gurung claims to have divorced Jyoti Gurung to evade his obligations,” Khumbharaj Gurung accused.

“Despite repaying the loan in their names, Gurung and his former wife will also have to repay the money they misused from the cooperative. They have misused a total of Rs140.81 million,” chairman Khumbharaj Gurung said.

But Dhanraj Gurung dismisses such accusations, saying that if he had used his divorced wife’s name while acquiring the new loan of Rs 1.2 million, why wasn’t he questioned then and there.

“I had indeed acquired the loan from Miteri Cooperative, but the cooperative’s staffers themselves filled out the loan application form,” Dhanraj Gurung claimed to the Post. “To be more clear, the handwriting can be verified.” He said it was the staff’s mistake not to notice that he had already been divorced.

The Post asked Dhanraj: “If that’s the case, why was the name of Jyoti Gurung, your wife, in the election candidacy nomination form when you contested the 2022 federal election from Syangja-2?” Gurung replied that he was not directly involved while filling out the form for his candidacy, and the mistake must have been made by his supporters.

Dhanraj, meanwhile, accused Kumbharaj Gurung of inefficiency, and claimed that the misappropriation of Miteri Cooperatives’ funds was due to Khumbharaj’s poor management. “He is trying to target me to hide his incompetence,” Dhanraj claimed.

Dhanraj Gurung has denied his involvement in the scam, arguing that his former wife, with whom he no longer has a relationship, misappropriated the money, so he cannot be held accountable.

Despite Gurung’s claim that he separated from his wife in 2019, Miteri Cooperative chair Kumbharaj reported he had registered a complaint against the Gurung duo and informed law enforcement agencies that the lawmaker continued to pay off the debts in his wife’s name until last year.

Copies of the vouchers Dhanraj Gurung reportedly used to deposit money into the cooperative’s account have surfaced in various media outlets.

After being charged with embezzling the cooperative’s funds, Dhanraj Gurung, speaking in Parliament on September 10, called for a proper investigation to clear his name.

A parliamentary special probe committee formed to investigate the crisis-ridden cooperatives submitted its report last month. The committee also recommended investigating Gurung and his former wife for misusing the cooperative’s funds.