Former NAC Chairman Adhikari, MD Kansakar among four convicted in wide-body aircraft procurement corruption

Kathmandu / Dec 6: The Special Court has convicted four individuals, including the then Chairman and Managing Director of Nepal Airlines Corporation (NAC) in the corruption case involving the procurement of two wide-body aircraft.

In a brief text of the verdict released late Thursday evening, the Special Court convicted then NAC Chairman Shankar Prasad Adhikari in his capacity as Secretary of the Tourism Ministry, NAC Managing Director Sugat Ratna Kansakar, and NAC Board of Directors members Buddhi Sagar Lamichhane and Shishir Kumar Dhungana.

However, former Tourism Minister Jeevan Bahadur Shahi has been acquitted in the wide-body aircraft procurement corruption case. He is currently serving as a member of the Karnali Provincial Assembly.

Shahi’s suspension as a member of the Karnali Provincial Assembly has been automatically lifted following his acquittal by the Special Court. He had been suspended after a corruption case was filed against him regarding the wide-body aircraft procurement decision, which was taken when he was serving as Tourism Minister in the federal government.

The Special Court convicted Adhikari, Kansakar, Lamichhane, and Dhungana in the corruption case related to the purchase of two wide-body aircraft.

The CIAA had lodged a corruption case against 33 individuals, including Shahi, in April 2024. They were accused of causing a loss of Rs 1.47 billion to the state in the procurement process of two Airbus A330 jets for NAC.

Late Thursday, the Special Court released a brief order of the verdict, declaring the then Secretary Adhikari, NAC General Manager Kansakar, and then NAC Board members Lamichhane and Dhungana guilty.

Foreign defendants, except for the escrow company involved in the aircraft procurement process and its representatives, have been found guilty. The Special Court has also found British national Deepak Sharma guilty in the case. He is the Chairman of AAR Corporation in the United States of America. The company, which was selected to supply wide-body aircraft for NAC, later added two other companies and made a purchase agreement.

German citizen Christian Neulen, who has been found guilty, is associated with three companies involved in the wide-body aircraft sales process. Romanian citizen Oleg Kalistru has also been found guilty by the Special Court.

The initial contract agreement with NAC was made with the US-based company AAR International and its Chairman and CEO, John Holmes. Similarly, German Aviation Capital and its Managing Director, Ana Topa, as well as Portugal’s Hi Fly Transport Aeros and its Chairman, Paulo Mirpuri, were also found guilty.

A full bench of the Special Court, chaired by Tek Narayan Kunwar and judges Tej Narayan Singh Rai and Ritenendra Thapa, determined that corruption in the two wide-body aircraft amounted to Rs 1.47 billion. This rare occurrence confirms the amount of corruption claimed in the charge sheet by the CIAA.

The Special Court has ruled that those found involved in corruption will be held liable for the recovery of the damages.

The Special Court has sentenced NAC’s then General Manager Kansakar to 2.6 years of imprisonment. Due to his position, he will serve an additional three months of imprisonment. However, as he is an elderly citizen, half of the initially assigned sentence will be reduced.

The Special Court has also imposed a fine of Rs 122.4 million on the defendants. The Special Court has sentenced the then Tourism Secretary Adhikari to 1 year and 9 months of imprisonment, including an additional three months. The then Joint Secretaries Dhungana and Lamichhane have been sentenced to 1.5 years each.

Dhungana, who was a joint secretary at the time, later became a secretary before retiring. Lamichhane was still working at the Ministry of Tourism when the corruption case was filed.

The CIAA had filed a corruption case against 32 individuals on April 4, 2024, including the former Tourism Minister Jeevan Bahadur Shahi, alleging corruption in the purchase of wide-body aircraft. The CIAA named 24 Nepali and 8 foreign nationals as defendants.

The group had established a dollar-funded company named Hi Fly X in Ireland. It was found that the company was set up specifically for the sale of aircraft.

The company, established on February 21, 2017, purchased two wide-body aircraft from Airbus and sold them to Nepal Airlines Corporation for Rs 24 billion.

NAC had decided to purchase two wide-body aircraft to expand its market. During this process, NAC selected a company named AAR International from the US. However, during the signing of the Memorandum of Understanding (MoU), German Aviation Capital and Hi Fly Aero Portugal were also included alongside AAR.

A consortium of three companies was formed for the purchase of the aircraft as per a separate sales agreement. These three companies established a company named Hi Fly X in Ireland. NAC had made an agreement with this company for the aircraft purchase.

In 2073 BS, the process of purchasing two wide-body Airbus jets for approximately Rs 24 billion was initiated. NAC’s purchase of two wide-body aircraft courted serious controversy as the procurement process was opaque.

The Public Accounts Committee of the House of Representatives (HoR) concluded in its 2075 BS investigation that NAC incurred a loss of about Rs 4.36 billion during the aircraft purchase.