The Tamesis
March 31, 2026
kathmandu – A detailed investigation has been launched into alleged money laundering offenses against three former prime ministers and two ex-ministers, with authorities intensifying scrutiny after months of preliminary investigations found discrepancies in financial and asset records.
The Department of Money Laundering Investigation (DMLI), with the assistance of the Central Investigation Bureau (CIB) of the Nepal Police, has arrested former prime ministers Sher Bahadur Deuba, KP Sharma Oli and Pushpa Kamal Dahal and former ministers Arzu Rana Deuba and Deepak Khadka Khadka launched an in-depth investigation.
Last week, the department sent a letter to police headquarters seeking support for the investigation. Acting on this demand, former minister and Nepali Congress leader Khadka was arrested from his residence in Budhanilkantha on Sunday.
The department conducted a preliminary investigation for nearly six months before the case was upgraded to a detailed investigation. The investigation formally intensified after discrepancies were discovered during this period, prompting authorities to expand their review.
The investigation was prompted by the discovery of fragments of burnt banknotes that had been vandalized, set on fire and destroyed in the residences of several leaders on September 9, 2025, the day after the Gen Z-led protests on September 8. Photos and videos emerged afterwards showing burnt currency notes at the homes of Deuba, Khadka and Dahal. Subsequent laboratory tests confirmed that the recovered fragments were genuine currency.
After conducting on-site inspection and collecting preliminary details regarding movable and immovable properties, the department through CIB officials launched a comprehensive investigation.
“After discrepancies were discovered during the preliminary investigation, the case has been transferred to a detailed investigation,” a department official told The Washington Post. “To facilitate this, we are conducting the investigation with the support of CIB personnel.”
CIB director-general and inspector-general Manoj KC said the bureau assisted in the arrests and supported investigations after receiving requests from the department.
“The request for CIB assistance was made through the police headquarters; we have extended necessary cooperation accordingly,” KC said, adding that Khadka was detained for questioning on the instructions of the police station.
Immediately after his arrest, Home Minister Sultan Gurung shared what he called a “CIB emergency arrest warrant” on social media, stating that former Energy Minister Khadka was being detained in connection with an investigation into funds recovered from his residence during the September 9 incident. However, authorities have not yet released further details about the ongoing investigation into the other defendants.
Investigations into Khadka and other individuals under scrutiny are ongoing simultaneously, according to investigative sources.
Former CIB chief and former DIG Hemanta Malla said this marks the first time in Nepal that a former prime minister has been investigated for money laundering. He said the CIB’s involvement would make the investigation more effective and provide insight into the alleged crimes.
The department conducted a preliminary investigation for nearly six months before the case was upgraded to a detailed investigation. The investigation formally intensified after discrepancies were discovered during this period, prompting authorities to expand their review. Photo: The Kathmandu Post
“In the past, the department has used the CIB to conduct complex and specialized investigations; continuing this practice is a positive step,” Marra told The Washington Post. “Investigating individuals who lead a country and hold significant power is not easy – there are often attempts to suppress or influence such cases. However, the fact that the department is taking the lead through the CIB is a positive sign and will help to uncover the truth.”
Deuba has held public office continuously since 1991 and won from Dadir Doula in all Assembly and Constituent Assembly polls thereafter. However, he did not participate in the House of Representatives election held on March 5. A week before the election, on February 25, he went to Singapore for medical treatment.
His wife, Arzu Rana Deuba, who served as foreign minister until the September protests, traveled to New Delhi on January 5 and has yet to return. Sources involved in the investigation said she had arrived in Singapore from Delhi. The current whereabouts of the Deuba couple have not been confirmed.
Sources also indicate that Deuba’s son Jaiveer Singh Deuba and his brother-in-law Bhushan Rana are currently abroad. On September 28, 2025, the department raided Rana’s residence in Jwalakal and seized electronic devices and documents. A few days later, his relatives’ homes were further searched.
Prakash Deuba, the nephew of the former prime minister and a member of the Sudur Pashihim provincial assembly, has also lost contact since the investigation began. There are reports that he has left India for the United States.
Deuba served as Prime Minister five times, in 1995, 2001, 2004, 2017 and 2021, and served as Home Minister in 1991 under the government led by Girija Prasad Koirala. His wife, Arzu Rana Deuba, served several times as a proportional representation MP and served as foreign minister in Oli’s government until the September protests.
According to reports, on September 9, protesters attacked the Deuba couple at their residence. After receiving hospital treatment, they traveled to Singapore for further treatment on October 26 and returned to Nepal 18 days later. The money laundering investigation was launched while the pair were still abroad following their subsequent departure.
Oli served as Prime Minister on several occasions and held important positions, including as Home Minister in 1994 and Foreign Minister in 2006. He has been a prominent political figure since 1991, winning several parliamentary elections. He lost the 2008 Constituent Assembly elections and again in the March 5 general election.
Oli was arrested on murder charges soon after Balendra Shah became prime minister after a commission of inquiry headed by Gauri Bahadur Karki found that he was responsible for the suppression of the September 8 protests. He is currently in police custody.
Dahal entered parliamentary politics after the political transition in 2006 and served as prime minister three times. His party is now part of a wider communist group, under the name Communist Party of Nepal, and has remained in government for much of the year since 2008, through changing alliances.
Dahal has long faced accusations of misappropriating state funds allocated for former Maoist fighters during the peace process. He originally lived in a Khumaltar property owned by businessman Sharada Adhikari, but moved after protesters set fire to the house on September 9.
Khadka, who served as energy, water and irrigation minister, has been remanded in custody for seven days with court approval as part of the ongoing investigation.
In accordance with legal procedures, CIB will conduct on-site investigations and submit the findings to the Money Laundering Investigation Department. Based on the investigative report and the legal opinion of the Government Prosecutor’s Office, the department can initiate proceedings before a special court or, if charges are not necessary, forward its decision to the Attorney General’s Office.
If a case is filed, the department can seek penalties, including jail terms, fines and recovery of embezzled amounts.
New progress was made in the investigation after Prime Minister Balendra Shah took office. A preliminary assessment of the assets of the former prime minister, ministers and their families has been completed, sources said.
Authorities have sought financial and corporate records from Nepal Rastra Bank, Nepal Securities Commission and the Office of Registrar of Companies to obtain details about bank accounts, investments and corporate transactions. The Department of Land Management and Archives also provided property records following a request made in October 2025.
Officials said the investigation was expedited after forensic reports confirmed that the charred remains recovered from residences in Deuba, Dahal and Khadka on September 9 were indeed genuine currency.
The developments come against the backdrop of several major corruption scandals in Nepal, many of which have long been criticized for weak or incomplete investigations.
These include the wide-body aircraft procurement case, Sudan scam, irregularities in Maoist fighter camps, disputes over tax settlement and encroachment on public lands such as Lalita Niwas, Patanjali land, Giribandhu tea estate, Tikapur land, Lychee Garden land, Bal Mandir and Bansbari land.
Other high-profile cases include the fake Bhutanese refugee scam and the visitor visa scam. Observers say many of these cases have been influenced by political interests and pressure, with investigations either hampered or downplayed. Even when agencies such as the Nepal Police and the Commission for Investigation into Abuse of Power complete investigations and refer cases to court, attempts are often made to influence judicial outcomes.
During the Covid-19 pandemic, further corruption allegations have emerged in cases involving Omni Group’s procurement transactions for medical supplies, irregularities in Nepal trust land, gold smuggling cases, collaboration fraud, security news procurement disputes, TERAMOCS, excise sticker printing and the Melamchi project.
Many of these cases involve political leaders. However, several cases were brought to court only after the politicians involved were allegedly “purged”, while others are still under investigation.
Although the CIAA recently filed cases against more than 50 people, including five former ministers and nine former secretaries, over the construction of the Pokhara International Airport, a comprehensive and conclusive investigation has yet to be completed.
Against this backdrop, the arrest of former minister Khadka and the inclusion of three former prime ministers in the money laundering probe mark a significant development.
Marra said if the investigation reaches a logical and independent conclusion, it could act as a deterrent to those in power.
“If this investigation involving senior leaders is concluded, it could prevent policymakers from amassing wealth through abuses of state power and violations of the law,” he said.
