Kathmandu: It has been a matter of speculation that Nepal’s rich is involved in the capital flight. But the government has not been able to produce substantial evidence to prove it.
In the meantime, a two-day Dubai Property Show was planned in the capital Kathmandu under the banner of DAMAC on January 21 and 22 with the slogan ‘invest today secure your tomorrow’. DAMAC Properties is part of DAMAC Group which has been in the real estate market since 1982, according to the official website of the organization.
The main objective of the event was to sell real estate properties in Dubai to Nepali super-rich families.
Nepal Police raided the event and arrested five Indian nationals and confiscated their passports. Nepal Police is preparing to file a case as per Act Restricting Investment Abroad (1964).
But the story, according to economists, does not end here. The incident can provide in-depth clues about capital flight from Nepal if investigated properly, an economist told Nepal Live Today. “This incident will be supportive to the government to identify and crack down the network of businesspeople who are involved in capital flight.”
This is not the first time such an exhibition was organized in Nepal. Nepal Live Today found that a similar expo event was held at Hotel Annapurna back in 2018 hosted by Dubai-based Big Pockets Real Estate (BPRE), an international real estate agency.
A high-level bureaucrat confessed under the condition of anonymity that such an event has been taking place in Kathmandu on a regular basis. “But the investigation agencies are not given authority due to nexus between politicians and business leaders.”
“It can be said that no agent organizes such an expo without seeing business scopes,” he told Nepal Live Today.
The incident is a big one in terms of investigating capital flight in the country, agreed Shishir Dhungana, former finance secretary. “There must be buyers in Nepal. Now the government should investigate and identify who were the buyers in the past and how they could manage to pay the money over there.”
The Department of Revenue Investigation should start an immediate investigation into the issue as per Foreign Exchange (Regulation) Act, 1962, he said.
The act will also come under the radar of the Financial Intelligence Unit (FIU) of Nepal Rastra Bank in case the source of money is not disclosed.
Nepali businesspeople’s Dubai connection has long been questioned. In February 2022, the chairperson of the Federation of Nepalese Chambers of Commerce & Industry (FNCCI) Shekhar Golchha was under controversy after his son’s lavish wedding ceremony in Dubai. During the wedding ceremony, Nepal’s top businesspeople had reached Dubai.
Many experts and observers, however, believe that the issue will fizzle out in a few days given that the government cannot take action against powerful business leaders and super-rich people.
“In Nepal, the nexus between politicians and businesspersons cannot be broken,” an economist claimed. “Like in previous cases, the issue will be compromised after politicians are assured benefits from businesspersons.”
Of late, Nepal’s foreign exchange reserve has dwindled, prompting government authority to impose import restrictions measures. The government has recently withdrawn restriction measures. But the authorities are not bothered by the capital flight through illegal investment on real estate by Nepali businesspeople abroad.