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Nepal tax officials register ‘biggest-ever’ case against hundi operators

 Kathmandu, August 28

Nepal’s tax authorities have filed a criminal case against seven people in what they are calling the ‘biggest-ever’ hundi case in the country.

According to the Department of Revenue Investigation, a claim of Rs 4.14 billion has been made in the case failed on Monday.

Hundi is an informal money transfer system that uses closed networks to transfer cash without actual cross-border transactions. Middlemen in two different countries facilitate the money transfer through a mutual agreement. One receives cash from the sender and the other gives the cash to the beneficiary nominated by the sender.

The two middlemen balance their books through the movement of money by illegal means such as smuggling of currency, commodities or invoice manipulation. Hundi is popular as it is cost-effective and flexible since it has no regulatory obligations. It is also efficient because it is controlled by a close-network of people, usually relatives and friends.

The practice is illegal because the government loses taxes, and it is used to launder money by criminals.

Those booked in the case are: Dal Bahadur Pun, Lawa Kumar Nepal. Mimila Thami Rai, Rajendra Gurung, Bidya Devi Gurung, Milan Gurung and Dharam Gurung.

The department registered the case after a year-long investigation, which began after police raided Zebo Travels in Kathmandu to recover Rs 120,000 from Dal Bahadur Pun and Lawa Kumar. According to a department source, the travel company’s owners Milan Gurng and Dharam Gurung live in the UK, from where they operate their illegal business.

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