Off the Record 141: Sirohiya & Lamichhane: Folie à deux
Issue 141 • 31 May 2024
It’s May 31, 2024, and you’re reading Off the Record.
I’m Pranaya Rana and in this newsletter, we’ll stop, take a deep breath, and dive into one singular issue that defined the past week.
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Good morning, good afternoon, and good evening from Kathmandu. Things are heating up in Kathmandu, quite literally, but we remain distant from New Delhi’s scorching 50-degree temperature. Indian readers, if you want to avoid the heat, come to Kathmandu where it’s still pleasant.
A quick shout-out to Li Xing from the Chinese University of Hong Kong for becoming my latest paid subscriber. Thank you for the subscription and I hope you enjoy reading this weekly epistle!
Now, on to the news.
Budget 2081-82
On Tuesday, Finance Minister Barsa Man Pun unveiled a Rs 1.86 trillion federal budget for the fiscal year 2080-81, setting an ambitious and unrealistic 6% growth rate. Last year too, the government had envisioned a 6% growth rate but actual growth was estimated at around 3.87% according to the Central Bureau of Statistics. The World Bank and the Asian Development Bank estimated even lower rates at 3.3% and 3.6%, respectively. So this 6% target is unlikely to be reached but it is an optimistic goal to pursue that will likely be revised later down the year.
This year, the government identified five priority areas — infrastructure for the agriculture, energy, and information technology sectors; economic reforms to promote the private sector; inclusion and social security; education and health; and good governance and service delivery. It also has five objectives in these priority areas — increase investment and growth by promoting the private sector; develop skilled human resources; increase productivity and employment; reduce poverty through the ‘just’ mobilization of resources; and make public services more effective.
These are all good priorities and objectives but how they will be translated into concrete plans and policies remains to be seen. As always, the budget is far more optimistic than expected but perhaps it is good to be a little optimistic at the beginning of the fiscal year. However, there are issues that the government should take cognizance of. For the upcoming fiscal year, capital expenditure has been increased by Rs 50 billion to Rs 352 billion. Capital expenditure is the portion of the budget allocated to investments in infrastructure while recurrent expenditure covers salaries for civil servants, elected officials, etc. However, Nepal rarely ever spends its capital expenditure in full. As of Thursday, May 31, only 41.85% of capital expenditure had been spent, according to the Financial Comptroller General’s Office which tracks government spending and revenue daily. Total expenditure remains at 64.18% which is not bad but recurrent expenditure accounts for the lion’s share of that amount. And only about a month remains in the current fiscal year. Hence, the term ‘asare bikas’, which refers to the spree of spending on infrastructure in the Nepali month of Asar, the final month of the fiscal year.
This budget appears largely focused on revitalizing the agriculture industry with subsidies on imports of machinery and agricultural inputs. An additional and unexpected move was Finance Minister Pun’s announcement that the government would study the commercial cultivation of cannabis for medicinal purposes. Pun also emphasized the promotion of the private sector and foreign direct investment by easing onerous regulatory frameworks and bureaucratic red tape. This also includes promoting the IT industry in Nepal, which should get a boost with Nepal adding another 900MW of clean electricity to the grid in the coming six months. If the glut of cheap, clean electricity is properly utilized, Nepal could become a hub for regional servers and a burgeoning IT industry.
There’s a lot more to the budget but I don’t have the necessary capacity or interest to analyze it at length so you can read an analysis from The Kathmandu Post’s Sangam Prasain and an opinion piece focused on federalism from Khim Lal Devkota.
Politics on Everest (Nims dai et al)
This past week, a video of a ‘traffic jam’ on Everest once again went viral, leading to a barrage of criticism of the Nepal government for issuing so many permits in a bid to take in cash. And this jam was after the cornice collapse on Everest on May 21 which led to the death of two climbers. Earlier this month, on May 2, the Supreme Court ordered the Nepal government to limit the number of climbers on Everest and make sure that everyone brought back what they took, given the amount of trash — and dead bodies — that is accumulating on the highest peak in the world. I’m not sure if the Nepal government will follow through with this order, given just how much money it raises in permits and taxes, not to mention the hundreds of Nepalis who receive employment. Still, something will have to be done as these videos are bringing a lot of negative publicity and making the Nepal government look like a bunch of greedy cash-grabbers, which, in fairness, they kind of are.
Then, there was more drama involving today’s most famous climbers — Mr Nirmal ‘Nims’ Purja. Nims, who has never shied away from courting controversy, stirred things up once again by alleging that the climbing ropes set up by his team had been deliberately cut and tossed aside. Many climbing companies use the same ropes to ascend so if any of these ropes had been cut, others would’ve reported on it too, but none did. In fact, many reached the summit shortly after Nims’ complaint. The Nepal government didn’t take kindly to Nims’ allegation. The Ministry of Tourism announced that it was launching an investigation into him for spreading ‘fake’ information and ‘tarnishing Nepal’s image’.
In the video that Nims posted, he is speaking to a team member who reports that ropes have been cut. So it is understandable that Nims would trust the word of an experienced team member but taking a video of the incident and posting it to the world with an inflammatory caption is quintessentially Nims. The man just cannot resist putting himself in the middle of any issue. Despite the ministry’s dismissal of his claims, Nims has stood by the cut-rope allegation, even posting a video as proof. We’ll have to wait and see who was right.
In other news, Kami Rita Sherpa climbed Everest for the 30th time last Wednesday, summiting twice in just 10 days. The man is just built different.
Mr Chen faces off against Mr Budhathoki
More drama unfolded on Twitter this week as Chinese Ambassador to Nepal Chen Song got into an ugly public spat with journalist Gajendra Budhathoki. On Monday, May 27, Budhathoki posted an innocuous tweet stating that the interest rate for the loan that Nepal took from a Chinese bank to build Pokhara International Airport was 5 percent and not 2 percent as stated. This tweet apparently incensed the Chinese Ambassador so much that he felt compelled to publicly respond to Budhathoki, saying verbatim, “Worst lies that I ever saw. It is public information, yet you dare to lie about it.” Budhathoki replied that he had access to the document and would publish proof. To which, Chen replied, “If you have the document, publish it. If you don't, need time to find proof, then what kind of intention is this. Spreading lies first, then wait for the tide to subside, and spread again.” Budhathoki replied that he would publish with proof and Chen responded once again, “We demand a formal apology from you and whoever people you represent.” More replies were exchanged but it was more of the same with the Ambassador demanding proof and Budhathoki promising to publish it.
However, as others on Twitter discovered, Budhathoki might have been mistaken in his original tweet. According to documents available online, the Nepal government received a loan from China Exim Bank at a 2% interest rate and another loan from the Chinese Ministry of Commerce at 0% interest. Both these loans were then lent to the Civil Aviation Authority of Nepal (CAAN) by the Nepal government at 5% interest. So Nepal doesn’t owe China 5% interest; it still owes 2%. But CAAN owes the Nepal government 5% interest. So Ambassador Chen is technically right but there was absolutely no call for him to engage in such a low brow back-and-forth with a journalist. He’s the Ambassador and certainly has access to avenues of redress most suited to his station. He can issue an official press statement or he can write to the Foreign Ministry if he is so offended. It is unbecoming of a diplomat to argue with journalists on social media using such poor language.
I understand that it can be frustrating to deal with misinformation but diplomats should be expected to have thicker skin and respond appropriately, given that they represent their entire nation in the host country. In 2020 too, the Chinese Embassy under Ambassador Hou Yanqi had also violated all diplomatic norms by issuing a vile press statement against Anup Kaphle, who was then editor of The Kathmandu Post. The statement called him “a parrot of some anti-China forces” and that the embassy “reserves the right of further action”. Unbecoming and vaguely threatening, just like how Ambassador Chen behaved with Budhathoki.
That’s all the time we have for today. On to main feature.
The deep dive: Sirohiya & Lamichhane: Folie à deux
On Wednesday, Lalitpur Police released Kailash Sirohiya from custody. Sirohiya had been taken into custody for nine days for investigation into ‘citizenship-related issues’ but the Dhanusha District Court decided on Wednesday that there was no need to hold him anymore and thus released him on condition that he appear when summoned.
Now that the dust has somewhat settled, the time is right to devote a deep dive to the entire saga. Last week, many readers had told me that they were looking forward to my take on the issue but I largely refrained, as the point of this newsletter is to take things slow and attempt to explain what is happening rather than trying to be the first.
So without further ado, let’s get into it.
In case you’re unaware of what is happening, let me give you a brief refresher. Last week, on May 21, Tuesday, Kailash Sirohiya, managing director of Kantipur Media Group and publisher of Kantipur daily and The Kathmandu Post, was arrested for investigation into ‘citizenship-related issues’. A man named Indrajit Mahato, who was once a member of the Nepali Congress and the UML but is now affiliated with the Rastriya Swatantra Party (RSP), had filed a case against Sirohiya at the Dhanusha District Court, alleging that the latter had obtained his Nepali citizenship through fraudulent means and that he owned multiple Nepali citizenship certificates.
Sirohiya’s arrest immediately set off a flurry of reactions from all and sundry. Journalists and editors, both local and international, came to Sirohiya’s defense, decrying the arrest as an attack on free speech. Politicians weighed in, using the arrest as a canvas on which to project their own political biases. Opposition politicians called out the arrest while politicians in government claimed that the arrest was routine judicial process and that there was nothing to be upset about. Even the US Embassy put out a statement in support of a free press. Others celebrated Sirohiya’s arrest, seeing him as the primary exemplar of all of the ills in the Nepali media — corruption, prejudiced reporting, blackmailing, political and business quid pro quo.
Upon his arrest, Sirohiya was remanded into custody for three days by the Dhanusha District Court. The remand was extended twice by three more days each. Sirohiya should’ve been spending at least nine days in police custody but he duly checked into a hospital complaining of heart issues and high blood pressure, something high-profile individuals do to avoid spending time in jail, as reported previously by his own newspaper. He was flown to Lalitpur via helicopter and admitted to the swanky Mediciti Hospital, from which he was officially released on Wednesday. Miraculously, his heart problems all went away upon release.
Lamichhane has not commented publicly on the issue but his party, the RSP, issued a statement saying that no one was above the law and the judiciary would decide what was what.
Numerous think pieces have been written and everyone has basically chosen a side. My opinion, which I expressed last week too, is that Sirohiya’s arrest was motivated by a sense of retribution on the part of the Home Minister. If Kantipur had not gone after Lamichhane in the way it has, Sirohiya’s citizenship would never have been made an issue. That said, I don’t believe that Lamichhane masterminded the entire case. But someone did. Mahato, the petitioner, claims that an unknown figure handed him a dossier of information on Sirohiya and he simply did his duty as a conscientious citizen by filing a case at the Dhanusha District Court. I don’t believe this for a moment. Mahato certainly knows where the information came from but I doubt the source was Lamichhane himself.
After the case was filed, the district attorney no doubt contacted his bosses at the Office of the Attorney General, who in turn must have consulted with Home Minister Lamichhane and Prime Minister Pushpa Kamal Dahal, who admitted that he had sanctioned Sirohiya’s arrest once the court issued a warrant. Now, why the district attorney sought an arrest warrant for Sirohiya is itself a mystery because Sirohiya poses no flight risk and has no access to evidence that he could potentially destroy. So we can surmise that Sirohiya was arrested, on the orders of Home Minister Lamichhane, to ‘punish’ him for his paper’s reporting and send a message.
The judiciary will decide Sirohiya’s fate now. I’m no lawyer so I’m not going to comment on how much weight the legal case has. Let me talk instead about these two personalities and what they represent. First, Mr Sirohiya, the owner and operator of the largest media house in the country. Kailash Sirohiya is a very powerful man with very powerful connections. His ownership of Kantipur daily, The Kathmandu Post, Kantipur Television, and Radio Kantipur have given him an unprecedented hold over public opinion and the flow of information. Kantipur is still the most widely read newspaper in the country. Its influence is massive; political figures, former prime ministers, and ambassadors of foreign countries routinely choose it as the medium on which to publish their opinion pieces. The Kathmandu Post, where I once worked, was once the most influential English-language daily but its status has fallen in recent years. Kantipur Television and Radio Kantipur are also very popular.
This dominance over the media ecosystem has not just brought Sirohiya power and influence but also untold wealth. Sirohiya’s penchant for luxury watches and the latest model cars is well known. He also has numerous other business interests directly as a shareholder and indirectly through his family members. His son, Sambhav Sirohiya, is the managing director of Kantipur Media Group but also operates M&S, an investment fund that has stock in numerous digital ventures like F1Soft, which owns and operates Nepal’s largest digital wallet eSewa, and HamroBazar, a popular online marketplace. None of this would’ve been possible without Kailash Sirohiya’s enormous wealth.
But it is no sin to acquire wealth. The only problem is if it is acquired illegally. There have long been rumors of Kantipur shaking down businesses with threats of negative reporting unless Sirohiya was accorded a significant stake. But these have remained rumors and rumor alone is no reason to vilify someone.
Which brings me now to Rabi Lamichhane. I’ve written a lot about Lamichhane before so I won’t repeat myself too much. In brief, Lamichhane is a wildly popular television presenter-turned-politician. The party he founded, the Rastriya Swatantra Party (RSP), won 21 seats in the federal parliament in the last election and has emerged as a significant player in the federal equation. Lamichhane was named Home Minister and Deputy Prime Minister by Prime Minister Pushpa Kamal Dahal in December 2023 but was stripped of all his positions by the Supreme Court just a month later in January 2024 due to issues with his citizenship certificate. What happened was that Lamichhane had once taken US citizenship but had given it up to return to Nepal and start his television career. Unfortunately, he had ‘forgotten’ to reapply for Nepali citizenship as is required by Nepali law. Kantipur reported on this issue consistently with numerous front-page stories. So, when Lamichhane lost all his positions, he blamed the media, particularly Kantipur.
In February 2024, Lamichhane held an unhinged press conference where he called out all Nepali media and aired their dirty laundry. He gave them the sobriquet ‘12 bhai’ (12 brothers) referring to the all-male editors of 12 newspapers and media portals and alleged that they all got drunk together and planned their front-page stories to collectively discredit people they did not like or had an issue with. Regarding Kantipur, he alleged that business houses were compelled to provide Sirohiya with stock in their companies under threat of negative reporting. He also revealed how Sambhav Sirohiya had gotten into a car crash in 2015 and alleged that Kailash had arm-twisted all other media houses to not report on it.
These allegations were just that, allegations. There was no real evidence of any wrongdoing. Still, the public believed them because Lamichhane was making them — and because people had long been suspicious of Sirohiya, his wealth, and his media empire. The 12 bhai appellation stuck, with social media routinely using it to mock editors and journalists who were critical of Lamichhane.
Lamichhane’s personal attacks against Sirohiya and his son seem to have struck a raw nerve, not just for the Sirohiya family but for Kantipur itself. The newspaper applied itself with uncharacteristic vigor to digging up dirt on Lamichhane. And it struck gold when it uncovered Lamichhane’s alleged involvement in embezzlement from numerous financial cooperatives. The primary perpetrator, however, was alleged to be GB Rai, once a close confidant of Lamichhane and owner of Galaxy 4K Television, the tv station where Lamichhane was once managing director and where he ran his popular show Sidha Kura Janata Sita. The accusations are complicated but let’s just say that Lamichhane’s name comes up numerous times in financial impropriety and embezzlement. Kantipur did not uncover any hard evidence; much of it was circumstantial evidence that seemed to link Lamichhane but did not impugn him outright. There are quite a few places where Kantipur has faltered in its eagerness to pin down Lamichhane.
By now, Kantipur has devoted over a dozen front-page stories to Lamichhane. I am willing to be corrected but I don’t think I’ve ever seen Kantipur report so diligently on any other public figure. This vehemence shows that for Kantipur, Lamichhane is not just another politician but a very personal target that the institution itself believes is guilty and must be ‘exposed.’ I don’t believe that Sirohiya himself directed his editors and journalists to report on Lamichhane like this but when Lamichhane targeted the media, Kantipur seems to have taken that affront personally and it became something of a crusade for its journalists.
Lamichhane definitely went too far by sanctioning Sirohiya’s arrest. He’s in fact shot himself in the foot because Kantipur was never going to be intimidated by the arrest of its publisher. Sirohiya and his editors have been arrested in the past, often at more dangerous times. Such actions only embolden them to go even further. Now, Lamichhane will face even more scrutiny, even more front-page news reports. Lamichhane’s retaliation will now trigger retaliation from Kantipur, which will likely not rest until Lamichhane faces the music in the same way its publisher did.
At the heart of this entire ordeal are two egos — Lamichhane’s and Kantipur’s. Lamichhane believes himself to be a new breed of politician who takes decisive action and that he should be held to a different standard than those who came before him. Kantipur — and Sirohiya — believe themselves to be the vanguard of journalism in Nepal. Neither of them is wholly wrong but neither is wholly right either. Lamichhane is a new politician who has promised new ways of doing things and his party has decent ministers like Sumana Shrestha. But he will not be given any benefit of the doubt just because he is new. Kantipur too once led the Nepali press industry but in recent years, its readership has narrowed and the younger generation no longer trusts Kantipur or any other mainstream media for that matter.
I’m not saying that both sides are equally culpable but both sides have erred. Lamichhane’s vindictiveness has cost him dearly but how Kantipur has devoted almost its entire journalistic strength to reporting on the arrest of its publisher has also cost it readers and trust. Many are now asking if Kantipur serves the truth or its owner. (You just have to look at the plethora of ‘explainer’ videos on YouTube about Kailash Sirohiya to see how young Nepalis feel about him and Kantipur.) There is damage on both sides and neither has come out looking better than before.
That’s all for this week. I will be back next Friday, in your emails, for the next edition of Off the Record.
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