ACC implicates 11 including four private suppliers

Embezzlement: The Office of the Attorney General (OAG) is reviewing the findings on fraud and embezzlement of millions of Ngultrums by employees of Dungsam Cement Corporation Limited (DCCL) in Nganglam, Pemagatshel, for prosecution.

The Anti-Corruption Commission (ACC) had forwarded its findings to the OAG last month after conducting a thorough investigation into the corrupt conduct of the DCCL employees. The commission conducted an investigation covering the period from January 1, 2010 to December 31, 2014 after the Royal Audit Authority (RAA) forwarded the alleged embezzlement case on June 25 last year, following a special audit of DCCL.

The commission’s investigation alleges that seven employees, including a former store assistant of DCCL, in collusion with other private individuals and suppliers working within the vicinity, had falsely claimed and embezzled a total of Nu 21.758 million (M) from the company in a period of over four years.

The findings also established the existence of collusive practices involving finance and store personnel, customs officials at check posts, and vendors. It also revealed serious systemic lapses and weak control systems that facilitated the siphoning off of company funds through rampant manipulation, fabrication, tampering of documents and fictitious payments.

Modus operandi

Processing and preparation of payment documents without proper verification and approval of the appropriate authority as well as without bills and supporting documents, payment documents made on the basis of photocopied bills, fake bills and duplicate bills, were some of the common modus operandi adopted by the suspects.

The ACC also found that suspects prepared and withdrew vendor cheques as self cheques or in the name of DCCL employees and third parties, and deposited vendor cheques directly into their personal bank accounts.

They are also alleged to have manipulated documents and forged signatures of recipients and vendors, inflated vendors bill amounts and inserted figures after approval by the approving authority, in addition to splitting vendor payments and creating fictitious liability.

To make payments to suppliers or vendors, the suspects asked them to resubmit their bills on the pretext that original bills were lost. The commission also found that money refunded by contractors was not accounted for and was shared between the perpetrators.

Transactions were done mostly with the Bhutan Hardware Agency, and more than Nu 6.727M was embezzled through fake bills and fraudulent payments followed by SN Trading, Birpara in India amounting to Nu 2.845M, ABB Pvt Ltd for Nu 1.921M, and Nu 1.280M from Hanuman Machinery and Supplies. They also embezzled Nu 1.136M and Nu 1.134M from Sharma Hardware Store and the regional revenue and customs office respectively. There were also many suppliers and vendors who supplied materials and other equipment to the DCCL which resulted in embezzled funds amounting to millions.

Probable criminal charges

The commission charged the 11 accused for embezzlement of funds by public servants, participation in an offence and possession of unexplained wealth.

DCCL’s finance head Jigme Tshewang, who is under suspension, is charged for nine counts of embezzlement of public funds and six counts of participation in an offence. He is also implicated for possession of unexplained wealth as he had received a cash deposit of Nu 2.587M in his savings bank account. The ACC requested the prosecution to recover more than Nu 4.226M from Jigme Tshewang.

Former assistant finance officer, late Sangay Tshering, who died in a car accident in 2014, is charged with 29 counts of embezzlement of public funds and two counts of participation in an offence. Late Sangay Tshering is liable to restitute Nu 11.246M to the state. However, as he is deceased, the commission recommends the OAG to obtain  restitution of Nu 5.408M from three dependents of late Sangay Tshering: his father, wife and sister-in-law, and forfeiture of the assets in lieu of the amounts embezzled by late Sangay Tshering.

The ACC has proven that the deceased in most of the occasions had shared the embezzled money with his dependents.

DCCL’s account assistant Yeshi Zangmo is charged on five counts of embezzlement amounting to Nu 3.030M, and 13 counts of participation in an offence.

Store assistant Kezang Namgyel and accountant assistant Tashi Dawa are booked for falsely claim and embezzling Nu 0.139M and Nu 0.209M respectively.

Kinley, who is working as a logistical officer in DCCL, is implicated for en-cashing a cheque amounting to Nu 117,883 intended for tax purposes and embezzling it instead.

Former DCCL’s store assistant Chencho Samdrup is charged for participation in an offence as he aided late Sangay Tshering in falsely claiming and embezzling Nu 0.828M. The amount was processed as payment for SN Trading as a 50 percent advance for supply of materials. They will have to restitute the embezzled amount to the state.

Four other private individuals: Nima Dhendup of Nima Dendup Construction, Kezang Wangchuk of Kezang Wangchuk Construction, Tempa Dorji of Yeshi Lhamo tshongkhang and Pawan Kumar Sharma were charged for participation in an offence. Pawan Kumar Sharma, an employee of Bhutan Hardware Agency in Phuentsholing is also asked to restitute Nu 1.397M and Bhutan Hardware Agency’s proprietor Sandeep Agarwal to refund more than Nu 0.130M.

ACC’s report states that Pawan Kumar Sharma of Rajasthan had started working with Bhutan Hardware Agency in 2010 and used to handle bills, receipts and supply of materials. However, he has been missing since December 2014 and is still at large.

Sandeep Agarwal deposited Nu 3.6M as a bond in March this year with the undertaking to produce his employee Pawan Kumar Sharma before the commission within one month.

DCCL is a subsidiary company of Druk Holding and Investment (DHI), an investment arm of the government. It has an installed capacity to produce 3,000MT of clinker and 4,130 bags of cement a day.

Rinzin Wangchuk