NIMB says auction was legal after CEO arrest in CIB probe
The CIB has alleged that assets linked to Smart Telecom, which had come under the control of the Nepal Telecommunications Authority, were sold through auction by the bank.
KATHMANDU: Nepal Investment Mega Bank (NIMB) has clarified that its loan recovery and collateral auction process was carried out fully in accordance with prevailing laws, following the arrest of its Chief Executive Officer Jyoti Prakash Pandey by the Central Investigation Bureau (CIB) on Tuesday night.
In an official statement, the bank said that all recovery actions were conducted under the Bank and Financial Institutions Act, the Secured Transactions Act, and the Loan Recovery Directive, insisting that due legal procedures were strictly followed.
The CIB has alleged that assets linked to Smart Telecom, which had come under the control of the Nepal Telecommunications Authority, were sold through auction by the bank.
The bureau also claimed that although the auction notice mentioned allocation of around NPR 40 crore for house rent and electricity charges, the concerned property owners reportedly did not receive the payments.
Based on these allegations, the CIB has launched an investigation against CEO Pandey on charges of fraud and criminal breach of trust, leading to his detention.
NIMB, however, has strongly rejected the allegations, stating that Rs 38 crore is still securely held. According to the bank, telecom-related equipment and assets of Smart Telecom were auctioned on Ashoj 3, 2082 BS, generating a total of Rs 4.60 billion.
Out of this amount, Rs 4.22 billion was used to settle syndicated loan obligations, while the remaining Rs 38 crore has been kept in an “earnest money auction account.” The bank said the funds will be released to the concerned property owners in phases after required verification and documentation.
Following the arrest of the CEO, the incident has created ripples across the banking sector, triggering wider debate over the legal boundaries between banking authority and regulatory intervention, especially in the handling of distressed corporate assets and large-scale loan recovery processes.
Despite the ongoing investigation, the bank stated it is fully cooperating with authorities and has already provided all required documents and details.
It also reaffirmed that day-to-day operations, financial governance, customer services, depositors’ interests, and shareholder confidence will not be affected.
NIMB further expressed gratitude to Nepal Rastra Bank, depositors, customers, and shareholders for their continued trust and support, and reiterated its commitment to transparency and regulatory cooperation going forward.
