The Commission for the Investigation of Abuse of Authority (CIAA) has filed a corruption case against 18 individuals, including Nepal Telecom’s Managing Director Sangita Pahadi. The case has been forwarded to the Special Court. The CIAA alleges irregularities involving Nepal Telecom’s billing system, maintenance fees, and other financial discrepancies that have caused a loss of Rs 330m to the state.
The other defendants in the case include Sunil Paudel, Pratibha Shrestha, Hemprabha Rampratap Karn, Nawal Chaudhary, Rajendra Shrestha, Jhabindra Lal Upadhyay, Devendra Khatiwada, Binita Shrestha, Amul Pradhan, Rajiv Kumar KC, Muktiprasad Aryal, Santosh Kumar Shrestha, Parmatma Bhattarai, and Shailesh Shrestha. Additionally, foreign nationals Long Yang and Hong Wei, along with the Chinese company AsiaInfo Inc, have also been named as defendants.
During the investigation, statements were recorded from former Chief Secretary Baikuntha Aryal, government employees including two joint secretaries, and members of the Nepal Telecom Board of Directors. However CIAA has decided not to file charges against 24 individuals who were under investigation in this case. No case has been filed against former Chief Secretary Aryal, former Secretary of Communications and then Chairperson of the Board, Hari Prasad Basyal, Bhupal Baral and Uttarkumar Khatri, both then Joint Secretaries and board members of Nepal Telecom, as well as board member Shankar Lamichhane.
Also exempt from prosecution are Company Secretary Rajendra Aryal, then Managing Director Dilliram Adhikari, then Technical Officer Bhanuraj Shrestha, former Director Radhakrishna Dhungel, and then Deputy Managing Director Minu Pradhan. Other individuals not charged include former Directors Sabina Maskey, former Managers Hari Dhakal, Gangasagar Matanche, Kumar Prasad Khatriwada, Prakash Manandhar, Subodh Rimal, Shobhan Adhikari, and Anup Regmi. Similarly, no case will be filed against former Deputy Managers Maniraj Poudel, Sudipraj Ghimire, Saroj Pradhan, Santosh Bhandari, and then Senior Engineer Prayag Khadka.
In Dec 2022, Nepal Telecom signed a contract with the company AsiaInfo, under which the company was to receive over Rs 3bn over five years—approximately Rs 650m annually. On 8 Jan 2023, the board of Nepal Telecom decided to sign a four-year Annual Maintenance Contract (AMC) with AsiaInfo, the company that had been providing billing system services. The board also approved a proposal to extend the contract for an additional year if necessary. Although the board had also decided to initiate a new tender process at that time, no such process has begun to date.
A billing system is essential for operating telephone and internet services. When one user calls another, the billing system processes the connection. Without sufficient balance, the billing system restricts the service.
Nepal Telecom has been using the current billing system since 2012. Although the system is supposed to be upgraded every eight–nine years, it has been in use for over a decade. This has led to several problems such as calls not connecting, service interruptions, and calls getting dropped mid-conversation. Service disruptions have been frequent in Nepal Telecom.
Over the past few years, various studies and investigations have highlighted significant flaws in Nepal Telecom’s billing system and recommended switching to a new one.
When the Sher Bahadur Deuba-led government was formed, Baikuntha Aryal became the Secretary of the Ministry of Communications and Information Technology in July 2021 and also assumed the role of chairperson of Nepal Telecom’s board. To appoint Sunil Paudel as MD of Nepal Telecom, the company’s “Managing Director Appointment and Service Directive, 2075” was amended and the former was appointed MD on 7 April 2022. After that, the process to call for a new billing system tender stalled further. The maintenance contract for AsiaInfo’s old billing system was also set to expire on 18 Sept 2022.
A government-formed committee under the Ministry of Communications raised questions about AsiaInfo’s performance and pointed out that service disruptions occurred due to the irresponsibility of the company’s technicians. A major issue started on 13 Jan 2023, but because the following two days were public holidays, maintenance work was delayed. The issue was identified and services resumed only after offices reopened on Jan 17. Despite recurring problems, Nepal Telecom kept awarding additional maintenance contracts to the same controversial company.
At that time, the board of Nepal Telecom approved the proposal to extend the maintenance contract with AsiaInfo for four more years—and an additional year if needed. Since purchases exceeding Rs 600m required approval from higher authorities, the board had to endorse the contract extension file accordingly.
