NIMB CEO Jyoti Prakash Pandey arrested over Smart Telecom asset auction probe

KATHMANDU: Police have arrested Jyoti Prakash Pandey, the chief executive officer (CEO) of Nepal Investment Mega Bank, over allegations linked to the controversial auction of assets belonging to Smart Telecom, whose operations had come under government control.

The arrest was confirmed by Manoj KC, chief of the Central Investigation Bureau (CIB) of Nepal Police. According to investigators, Pandey has been detained on allegations of fraud and criminal breach of trust in connection with the disposal of Smart Telecom assets, which authorities claim had legally fallen under state control.

Smart Telecom Assets Under Government Control

Smart Telecom had received a basic telephone service licence (BTSL-01) from the Nepal Telecommunications Authority on Baisakh 2, 2070 BS to operate telecommunication services in Nepal. However, the company’s licence was automatically cancelled effective Baisakh 3, 2080 BS after it failed to renew the permit as required under Section 25(5) of the Telecommunications Act, 2053.

Following the cancellation, all telecommunications infrastructure, systems, networks, and related assets of Smart Telecom were brought under the control of the telecom regulator in accordance with Rule 18 of the Asset Management Regulation for Telecommunication Service Providers, 2079.

Investigators allege that despite the assets being under government control, a loan recovery process involving Nepal Investment Mega Bank moved ahead with an auction of Smart Telecom equipment and infrastructure, allegedly with the intention of undermining government ownership rights.

Arrest While Allegedly Attempting to Leave

Police said Pandey, who also served as chair of the Loan Recovery Committee (LRC) involved in the auction process, was arrested on Tuesday night at around 8:00 p.m. from the Madan Bhandari Highway area in Kamalamai Municipality–6, Sindhuli.

According to the CIB, he was detained during a vehicle inspection operation conducted with support from the District Police Office, Sindhuli, after allegedly switching off his mobile phone and attempting to flee.

Pandey, 63, originally from Raktakali in Kathmandu Metropolitan City–18 and currently residing in Manbhawan, Lalitpur Metropolitan City–5, is currently under investigation.

Supreme Court Petition and Banking Sector Scrutiny

The controversy surrounding Smart Telecom’s assets had already reached the judiciary after chartered accountant Bhes Raj Luintel filed a writ petition at the Supreme Court seeking an investigation into the auction process.

The CIB further stated that investigations into the alleged irregularities uncovered possible collusion involving the issuance of loans exceeding NPR 4 billion without collateral. Authorities claim evidence points to coordination involving another commercial lender, Prime Commercial Bank, in the financing arrangement.

Allegations Over NPR 400 Million Rental and Utility Dues

Police are also investigating allegations tied to an auction notice issued by Nepal Investment Mega Bank on Ashwin 3, 2082 BS. In Clause 2 of the notice, bidders were reportedly required to commit a lump-sum additional payment of around NPR 400 million to cover outstanding house rent and electricity dues owed by Smart Telecom to landlords where telecom equipment had been installed.

However, investigators claim the bank collected the amount but failed to pay outstanding rent and electricity charges to property owners, triggering additional allegations of fraud and criminal breach of trust under the National Penal Code, 2074.

The arrest marks a major escalation in one of Nepal’s most closely watched telecom and banking controversies, raising questions over the management of distressed telecom assets, banking due diligence, and the legal handling of government-controlled property.