Case filed against SEBS for embezzlement of funds raised for earthquake victims

Kathmandu: Society of Ex Budhanilkantha Students (SEBS) in Nepal and SEBS-North America in the United States, have been accused of embezzling funds they raised for the earthquake victims in Nepal. A complaint filed by Navin Shrestha, a SEBS member and alumni of Budhanilkantha School, on 09th July 2019 at the District Administration Office of Kathmandu, cites that half millions dollar raised during 2015-2016 in the United States for Nepal was embezzled on both sides in the US and in Nepal, and has demanded for a thorough investigation and legal actions.

The total fund of USD 468,558 (NRs 50.3 million) was collected from taxpayers in the United States; out of which NRs 35.2 millions seems missing when the separate audit reports of SEBS-North America and SEBS Nepal are compared; since only a sum of NRs 11.3 millions has been received by the Nepal based SEBS as per its audit reports of 2015-2017. In addition, the jointly run website of both organizations mentions in its finance report that an amount of USD 38,010 (NRs 4 million) was raised for the Nepal based new political party Bibeksheel. Raising tax exempt funds for a foreign political party is restricted in the United States, while it's illegal for a Nepali political party to receive funds from abroad sources as well as accept donations from a local NGO.

Sebs Nepal audit report mentions donating a sum of NRs 200,000 to Prabhakar Ghimire who in turn has donated the same amount to Bibeksheel Party with a cheque (Prabhu Bank, cheque no 055215 dated 28/04/2015) with a note on the cheque – Courtesy SEBS-North America. Use of ‘hundi’ methods is a serious offense in the US while using such loopholes in unethical in Nepal.

SEBS Nepal, as per audit report has donated NRs 10.1 million to various individuals and a few organizations in Nepal; something that is only allowed to foreign donor agencies and INGO with some directives. Nepal’s audit report shows that SEBS rented NRs 5.4 million worth helicopter services from YKC Aviation to distribute NRs 3.5 worth of tarpaulin.

SEBS in Nepal has been found appointing three different auditors every year since 2015/16 (2071/72 B.S) while it hasn’t submitted the audit report of 2017/18 (2074/75 B.S.).
While SEBS North America has been found employing single person, Kiran Sitaula – a Nepali origin American citizen and a vice-mayor of Indian Heads in Maryland USA, every year as the auditor. Kiran has also been the major fund-raiser, handler and auditor as well. The US based audit report suggests that an independent accountant and auditor has not been hired while submitting the tax returns to the IRS (Internal Revenue) of the US. 

As per Nepalese law, funds from abroad should be transferred through banks and financial institutions authorized by Nepal Rashtra Bank. In this case, however, Kiran sitaula has been found transferring money to people and organisations in Nepal through illegal means like hundi,, Paypal etc.

The recipients including SEBS Nepal and Bibeksheel should also be brought under investigation and legal action. The compliant thus demands thorough inquiry into the irregularities mentioned, legal action against those involved and cancellation of the registration of SEBS Nepal and request for legal action against SEBS North America and Kiran Sitaula be discussed with the US on bilateral relations. The complain has been copied to the Social Welfare Council of Nepal as well.