The Commission for the Investigation of Abuse of Authority (CIAA) has filed a corruption case against Surendra Kumar Paudel, chairman of Nepal Reinsurance Company, the country's first and largest domestic reinsurer.
The anti-corruption body submitted the case to the Special Court on Sunday, alleging that Paudel and seven other individuals embezzled public funds during their tenure at Udayapur Cement Company. Paudel served as general manager of the cement firm at the time of the alleged offenses.
As per a report from The Kathmandu Post, Paudel is accused of embezzling Rs124.72 million. The agency has also claimed Rs465.27 million against Nawal Kishore Shah, acting general manager, and Rs126.37 million against Mahesh Prasad Kafle, deputy general manager.
The remaining defendants include Sanjay Kumar Lal, chief of the production division; Ravi Chandra Paudel, head of the production department; Hari Prasad Adhikari, cement production division officer; and Ram Bahadur BC, head of the sales division. The CIAA is seeking similar penalty amounts against these officials.
The allegations center on the misappropriation of government property, which the CIAA claims resulted in financial losses to the state. Investigators identified discrepancies in clinker consumption during cement production operations.
Records for fiscal year 2017-18 indicated 33,914 metric tons of clinker in inventory. However, a physical inspection conducted on June 26, 2018 found only 32,785 metric tons, suggesting 1,129 tons were unaccounted for.
Nepal Reinsurance Company is the country's first domestic reinsurer, established in 2014 as a public-private partnership. According to ICRA Nepal, the government holds approximately 44% of the company, with 13 non-life insurers and seven life insurers among major stakeholders.
The rating agency describes Nepal Re as "strategically important" to the government, given its position as the only reinsurer with sizeable sovereign ownership. According to Dun & Bradstreet, the company has 154 employees and generates approximately $44 million in annual revenue.
Under Nepal Insurance Authority rules, domestic insurers are required to cede a portion of their business to local reinsurers. Nepal Re and privately held Himalayan Re are the only two reinsurers operating in the country.
Paudel was appointed chairman of Nepal Reinsurance Company for a four-year term on September 5, 2025. The appointment was made by then Finance Minister Bishnu Paudel.
The alleged offenses date to fiscal year 2017-18, raising questions about whether background checks or vetting processes were conducted prior to his appointment to the state-backed reinsurer.
Neither Nepal Re nor the insurance regulator Beema Samiti have publicly commented on whether Paudel will continue in his role during legal proceedings. The company's board includes two government nominees, including the chairperson, according to ICRA Nepal.
The Finance Ministry, which appointed Paudel and oversees the government's 44% stake in the reinsurer, has not issued a statement on the matter.
