Nepal Police have initiated further investigation into Nepali Congress lawmaker Maya Rai following her arrest on Saturday. Rai, who had been on the run despite an arrest warrant issued by Kathmandu District Court, now faces charges of organised crime and fraud relating to a major cooperative embezzlement case.

Rai, who became a Member of Parliament under the proportional representation quota during the 2022 elections, is accused of misusing substantial depositor funds during her tenure as assistant secretary at the Swarnalaxmi Cooperative located in Kalimati, Kathmandu.

According to Superintendent April Raj Bohara, spokesperson for the District Police Range, Kathmandu, the court on Sunday granted permission to detain Rai for three days for further investigation.

“We have been given three days to investigate the case against her. She will be probed for organised crime and cooperative fraud,” Bohara said.

According to the police, Swarnalaxmi Cooperative is alleged to have embezzled a total of Rs1.19 billion. Rai, along with others, are accused of siphoning off that amount from 690 depositors.

Rai’s arrest follows a supplementary complaint filed by cooperative victims, including Suman Khanal, alleging her involvement in siphoning off millions of rupees. Although a previous case had implicated 39 individuals including Rastriya Swatantra Party (RSP) President Rabi Lamichhane, fresh complaints specifically named Rai, prompting police action.

Gitendra Babu (GB) Rai, chairperson of the Swarnalaxmi Cooperative, is also accused in the same case, including the misappropriation of funds in several other cooperatives, but remains at large. Police are struggling to pin Rai’s whereabouts despite Interpol’s red notice against him.

The Parliament Secretariat was formally notified of Maya Rai’s arrest on Sunday. Speaker Devraj Ghimire read the arrest notice during a parliamentary session on Sunday, confirmed Ekram Giri, the Secretariat spokesperson.

Rai, who had been absconding for eight months, stirred controversy by visiting Parliament to mark her attendance on the opening day of the budget session on April 26, despite being a fugitive. Her unhindered entry and exit in Parliament raised questions over the home ministry’s handling of the situation, particularly given the Congress party’s leadership of the ministry.

Congress leader Ramesh Lekhak is the home minister.

Previously, Rai had been continuously absent from parliamentary sessions without informing Parliament. According to Giri, the spokesperson, Rai registered her attendance on the opening day of the budget session, April 26.

Police claimed that although they had for long been searching for Rai, they could arrest her only on Saturday after based on a tip-off that she was now in her own residence.

Although other accused individuals, including Lamichhane and former deputy inspector general (DIG) of police Chhabilal Joshi, had already been arrested and legal proceedings initiated into their alleged involvement in the misuse of cooperatives funds, Rai had evaded arrest until now.

The parliamentary special committee, formed on May 28 last year to probe the embezzlement of savings in cooperative organisations, submitted its report to the government in September after an investigation that lasted more than three months.

Although the committee took three months, including in the questioning of employees of cooperatives linked to GB Rai, it failed to uncover any evidence implicating Congress lawmaker Rai, who had served at the Swarnalakshmi Cooperative in Kalimati.

Shishir Khanal, a member of the parliamentary special investigation committee and lawmaker from the Rastriya Swatantra Party (RSP), said that during the committee’s investigation into the embezzlement of cooperative savings, they had no information on the involvement of lawmaker Rai.

“There are doubts as to whether the committee may have overlooked certain matters, given that Maya Rai’s involvement was not detected at the time,” Khanal said.

Similarly, Ishwari Devi Neupane, who represented the Congress in the same committee, said that during their investigation, the committee did not get any information on Rai’s involvement.

“Due to the committee’s time constraints, it was not possible to investigate all matters in detail,” Neupane said.

The parliamentary special probe had a term of reference of three months and an additional 15 days.

Meanwhile, Khanal alleged that as the committee had been focused on specific individuals, others involved in the embezzlement of cooperatives savings, including Rai, were not brought within the scope of its investigation.

The parliamentary committee was formed following continuous pressure from the Congress, claiming that Lamichhane, the president of RSP, was involved in the embezzlement of savings from various cooperatives.