By Rick M 
Rabi Lamichhane, the former deputy prime minister of Nepal, was picked by the police in relation to an elaborate cooperative embezzlement case, and since then, his supporters have protested across the country. Lamichhane, who simultaneously acted as Home Minister, was arrested by the police on Wednesday evening after charges of the embezzlement of funds at the Supreme Cooperative organization were investigated for several weeks.
The arrest was prompted by a parliamentary committee report which named Lamichhane and several other politicians in a scam that the parliamentary committee claimed swindled thousands of depositors of millions of rupees. The Supreme Cooperative, one of the biggest savings and credit cooperatives of Nepal was shut in 2023, and caused many small investors and depositors to become bankrupt.
Lamichhane is also accused of using its influence to shield the cooperative’s management and slow down the investigation into its operations, police officials say. The former deputy PM has always been vocal denying any section of the accusations showing that they are politically influenced and that someone is out to bring him down.
The arrest has sparked protests in several regions of Nepal, including Chitwan, where Lamichhane has his base of operation. Members of his Nepal Independent Party have protested on the streets for his release and alleged that the government is persecuting him for political reasons. The protests have resulted in altercations with the police in some areas and this has tipped off political chaos.
The case has raised a lot of eyebrows in Nepal as political leaders and anti-corruption campaigners, as well as the Nepali civil society, regarded it as a barometer for the willingness and capability of the country to deal with corruption and other related financial crimes. As for the opposition, they demanded that in the investigation, not only Lamichhane but also all the politicians and businessmen with whom he and the organizers of the fraud in the cooperative are associated.
The failure of the Supreme Cooperative has again exposed the weak linkages in the Nepalese financial system, especially in the lack of an adequate policy and supervisory frameworks for cooperative entities. Most of the people in Nepal especially those in the rural areas mostly depend on such cooperatives for saving and credit services, any instabilities in this sector can greatly affect the economy of the country.
Cooperative troubles have raised controversies of political authorities: many persons, who suffered losses, complain that the authorities did not react adequately and did not defend the rights of small investors. Lamichhane’s arrest is considered by some as a government’s show of seriousness in fighting corruption that critics dismiss as tokenism.
Since the legal case against Lamichhane continues to evolve, the case is sure to blow political implications. For now, the credibility of the former deputy PM’s party, which has declared itself an anti-corruption force, is at stake. The larger political dynamics in Nepal may also evolve due to pressure on political incorporation and people’s disillusionment with institutions.
This cooperative fraud case has again raised questions regarding the enhanced call for efficient financial control and regulation in the Nepalese economy. Scientists speak about systemic changes that would help to avoid such scandals in the future and strengthen people’s trust to the financial sphere. The situation has led the government to pledge action, but the public has taken this with a pinch of salt, in this sense people doubt the political will from the helm to effect change.
As Nepal works through this newest of political problems, the country stands before it in the dilemma of how to assay justice and avoid political instability. The decision made in Lamichhane’s case as well as the findings and future course of the cooperative scandal investigation shall have ramifications in the Nepali political and economy in the future years.