The Thimphu dzongkhag court, after more than three years of legal proceedings, has rendered its decision on the case of alleged irrational financial transactions of Nu 100 million between the Royal Insurance Corporation of Bhutan Limited (RICBL) and Nubri Capital Private Limited (NCPL ).
The court acquitted three defendants.
Former RICBL executive director Sonam Dorji was acquitted of two counts of forgery and abuse of office.
However, the court had given him the benefit of the doubt by adjourning the case in which the defendant was accused of failing to declare a conflict of interest. The April 13 court ruling said there is circumstantial evidence of not declaring his conflict of interest as a promoter of Nubri Capital, but could not prove it beyond a reasonable doubt.
RICBL management invested Nu 100M at an interest rate of 9% per annum in Nubri Capital on February 5, 2013, then reinvested Nu 108M at 11.75% in RICBL after three days.
Sonam Dorji was one of the promoters of Nubri Capital as he contributed Nu5.334 million to its paid-up capital and held 27.67% of the total paid-up shares. However, Sonam Dorji had sold its shares and currently owns 10%.
The Office of the Attorney General (OAG) said that on February 1, 2013, the RICBL’s Assets and Liabilities Committee (ALCO) directed the finance and accounting department to compare interest rates offered by banks and corporations. fund management and investing in bond buybacks. funds with the one offering the highest interest rate. Sonam Dorji participated in the ALCO meeting without declaring his conflict of interest.
The court, however, established that the defendant did not influence the decision of RICBL’s management to deal with Nubri Capital, but did so in accordance with applicable regulations. There was also documentary evidence where Sonam Dorji declared his conflict of interest. These were, according to the decision, evident from four decisions made by the eight-member meeting on February 1, 2013, the seven-member meeting on March 23, six members on June 11 and nine members on July 29. There was further evidence from the 126 executive leadership meetings held on April 4, 2012, the letter written by ED to the Chief Executive Officer (CEO) on February 12, 2013, and the CEO’s submission to court on July 21, 2020.
“On the finding of circumstantial evidence not constituting proof beyond a reasonable doubt, the court therefore gave him the benefit of the doubt by adjourning the case,” the decision reads.
Regarding the commission charges amounting to abuse of office and forgery that the OAG brought against Sonam Dorji, the court said that the decisions to invest in Nubri Capital were made by the ALCO, which was then approved by the Technical Advisory Committee of the Board of Directors and the Board of Directors. of directors.
OAG said Sonam Dorji, intending to benefit Nubri Capital, knowingly and deliberately ordered AFD Managing Director Yeshey Jamtsho and CID Managing Director Kinzang Dorji to invest in the takeover of Nu 100M’s obligations with Nubri Capital and to perform the relevant contract. .
He also asked the duo to borrow Nu 108M from Nubri Capital (including Nu 100M from RICBL).
The court also acquitted Yeshey Jamtsho and Kinzang Dorji, initially charged with abuse of office, then reduced to violation with a plea bargain from the prosecutor, finding that the other committee members, including the CEO, were not charged. although the decisions were made by the Committee. “If three defendants were to be convicted, other members would also be liable,” the court ruling said.
The RICBL’s ALCO is the highest decision-making committee at management level. Members of ALCO include executives and general managers of different departments. The committee is a forum where prudent credit, fundraising and valuation decisions are made.
The case was registered in 2019 after the Anti-Corruption Commission (ACC) referred the case to the MPC in 2018.
The ACC began investigating the allegation of an irrational investment made in the country’s first private fund management company, Nubri Capital, in October 2016. The investigation was based on a 2015 audit report submitted by the Royal Audit Authority (RAA) and a commission complaint received by anonymous letter.
The RAA report said that illogical conversion of bond buyback fund into investment in Nubri Capital resulted in loss of income of 16.814 million Nubri(M) and irregular borrowing from Nubri Capital resulted in loss of income of 2.449 millions more Nubri.