A Crisis of Regulatory Credibility

Nepal’s financial history has entered a decisive judicial phase following the completion of an investigation into a major financial crime allegedly carried out under the protection of private-sector actors and officials of regulatory bodies. The case, which brings together influential business figures, insurance company chairpersons and CEOs, brokerage firms, former heads of regulatory institutions, and individuals linked to major business houses, has been filed as a single organised economic crime and money laundering case. Its scale—over Rs 100 billion in claimed losses—has raised serious concerns about the integrity of Nepal’s financial system and exposed how deeply financial misconduct may be embedded within it. The case against 39 individuals, including Infinity Holdings chairman Deepak Bhatt, business house director Sahil Agrawal, and Sulav Agrawal, goes far beyond allegations against a few individuals. It highlights growing opacity and fragility in the relationships between the state, regulators, financial institutions, capital markets, and the private sector. Allegations include misuse of insurance funds, artificial manipulation of the securities market, prohibited transactions, and the use of complex financial structures to launder illicit gains and present them as legitimate. If proven in court, the case would represent not just financial wrongdoing but an organised assault on public trust in the financial system.