RICBL, not ED, benefited from Nubri Capital investment: High Court


All defendants charged by OAG and VAC acquitted

Rinzin Wangchuk

Upholding the judgment of the lower court, the High Court (HC) said that the Royal Insurance Corporation of Bhutan Limited (RICBL) and not its chief executive benefited from Nubri’s 100 million investment in Nubri Capital Private Limited.

The HC on July 20 acquitted the former executive director (DE) of the RICBL and two managing directors. The Attorney General’s Office (OAG), aggrieved by the Thimphu dzongkhag court’s decision which was in favor of three defendants, appealed to the HC in April this year.

Based on the findings of the Anti-Corruption Commission (ACC) investigation, the OAG accused Sonam Dorji of failing to declare a conflict of interest, official misconduct and forgery while the chief executive of the AFD, Yeshey Jamtsho and the director general of the CID, Kinzang Dorji, for official misconduct. Sonam Dorji was one of the promoters and shareholders of Nubri Capital.

Reasons for acquittal

The HC established that Sonam Dorji did not influence or coerce RICBL’s management to invest with Nubri Capital from the bond buyback fund (BRF). It complied with the regulations in force.

“It has also been proven beyond reasonable doubt that the Royal Monetary Authority (RMA) also approved the BRF, which was supposed to be held in an escrow account, for use as the Statutory Liquidity Ratio (SLR)”, declared the judgment rendered by three sitting judges. declared.

In his testimony in the lower court on September 7, 2020, RICBL’s Head of Finance and Accounting Department, Zarna Moktan, also said that RICBL management invested Nu 100M at an interest rate of 9% per year in Nubri Capital in February 2013 and later. reinvested Nu 108M at 11.75% in RICBL.

The court noted that although there was an interest rate difference of 5.25%, the company made a profit by reinvesting the same amount at 17% per annum, which was the interest rate The highest.

“Zarka Moktan’s submission to the court made it clear that Sonam Dorji gained nothing from the investment except for the insurance company,” the judgment reads.

Defendant Sonam Dorji also argued in court that RICB benefited 5.25% (17%-11.75%) per annum, or Nu5.25 million annually, from the investment made in Nubri Capital , contrary to the claim that RICB lost 2.75% (9% -11.75 percent.

Sonam Dorji said the investment was made in accordance with the power of attorney granted by the board and the managing director, which was then approved by the technical advisory committee of the board and the board.

Conflict of interest

HC also established that there was documentary evidence where Sonam Dorji declared his conflict of interest. The court also noted that before setting up Nubri Capital, Sonam Dorji, then managing director, tendered his resignation indicating his intention to set up such a venture. The board first accepted his resignation and then asked him to continue his service at RICB and promoted him to the position of ED. The Board took note of his submission and was aware of his equity holdings in Nubri Capital.

OAG had stated that on February 1, 2013, the ALMC had ordered the AFD of the RICBL to compare the interest rates offered by banks and fund management companies and to invest in bond buyback funds with the one offering the highest interest rate. Sonam Dorji participated in the Asset/Liability Management Committee (ALMC) meeting without declaring his conflict of interest.


The ED was also accused of forgery alleging that the letter to the CEO by the former ED declaring a conflict of interest directing the two managing directors to implement ALMC’s decisions to invest in Nubri Capital was forged.

The court found that the CEO as well as the staff were present in the office and that the office was fully operational even on holidays, as the legal audit was in progress from February 3 to 26, 2013. The CEO also pointed out the letter indicating that the head of GAD/HRD for the necessary measures which confirmed that the letter was not falsified.

The general managers

The court also acquitted Yeshey Jamtsho and Kinzang Dorji, initially charged with abuse of office, then reduced to a violation with a plea bargain from the prosecutor, finding the duo carried out decisions made by the committee. The decision also stated that the ALMC members, management team and board were aware that Sonam Dorji was the promoter and shareholder of Nubri Capital and no questions were raised about it.

In their statement, Yeshey Jamtsho and Kinzang Dorji claimed that the MPC had asked them to appear as a “state witness” although they did not commit any offence. “After we appeared in court, the district attorney made us sign a plea agreement saying it was a legal proceeding,” they said. “We also believed that we were only representing as witnesses for the state that we had signed a plea bargain as instructed by the OAG. We only learned the meaning of “plea bargaining” after three years of legal proceedings.

Sonam Dorji and Yeshey Jamtsho have already resigned from the RICBL. Kinzang Dorji was suspended from his post in 2018.

Background to the case

The case was registered in 2019 after the ACC referred the case to the MPC in 2018.

The ACC began investigating the allegation of an irrational investment in the country’s first private fund management company, Nubri Capital, in October 2016.

Based on a complaint letter in 2015, the ACC investigated the matter and dropped it. However, the case was reopened after the second ACC president resumed his duties. Some have alleged that the ACC pursued the case under pressure from RMA. ACC officials declined to confirm the allegation.

Who is indebted?

The ACC and the OAG will have to issue an order to reinstate Kinzang Dorji to his former position at the RICBL if the OAG or the ACC decides not to appeal.

Pursuant to the SC order issued July 17, 2013, if acquitted at trial, a person must be reinstated and receive full pay as arears for the period of ineligibility.

The SC said the suspension provisions of the anti-corruption law may be valid but that civil servants or elected officials should not be suspended beyond a period of 12 months or three months respectively for the conduct of investigation. “It must be ensured at all times that the Public Treasury is not responsible for paying subsistence allowance as the public official is not doing any work beneficial to the government,” the SC order said. “


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