Nepal’s Commission for the Investigation of Abuse of Authority (CIAA) filed its fourth corruption chargesheet on May 7, 2026, at the Special Court in Kathmandu, naming 13 individuals including former Finance Minister Gyanendra Bahadur Karki over alleged financial irregularities amounting to Rs 3.62 billion in the construction of Pokhara Regional International Airport (PKR), The Himalayan Times reported.
The accused, who span senior civil servants across multiple ministries and officials of the Chinese state-owned contractor China CAMC Engineering Co., Ltd., allegedly colluded to illegally exempt the contractor from tax and customs obligations that were contractually inscribed as the company’s liability under Nepali law. Gyanendra Bahadur Karki thereby becomes the sixth former minister to face prosecution in what has now evolved into the most sustained judicial reckoning in Nepal’s aviation history.
According to the CIAA’s chargesheet, the original commercial contract between the Civil Aviation Authority of Nepal (CAAN) and China CAMC had incorporated taxes, duties, and applicable charges within the contract price. These were obligations the contractor was bound to discharge under prevailing Nepali statute. A separately executed Implementation Agreement subsequently inverted this arrangement, relieving China CAMC of those payments while simultaneously allowing it to retain the tax component already embedded in the contract price. The state treasury received nothing; the contractor received twice. This structural manoeuvre — which the CIAA formally characterises as a “double benefit” — forms the legal nucleus of the fourth chargesheet and distinguishes this case from the three that preceded it.
The 13 Named in the Chargesheet
The chargesheet names eleven Nepali public officials alongside the contractor company and two of its executives.
| Position | Name | Position / Role | Additional Details |
|---|---|---|---|
| Former Minister | Gyanendra Bahadur Karki | Former Finance Minister | Served under the Deuba cabinet in 2017 |
| Former Bureaucrat | Shankar Prasad Adhikari | Former Finance Ministry Secretary | Oversight authority over airport project finances |
| Former Bureaucrat | Maheshwar Neupane | Former Culture Ministry Secretary | Oversight authority over airport project finances |
| Former Bureaucrat | Kewal Prasad Bhandari | Former Joint Secretary, Finance Ministry | Charged in the case |
| Former Bureaucrat | Suresh Acharya | Former Joint Secretary, Culture Ministry | Charged in the case |
| Former Bureaucrat | Dandhuraj Ghimire | Joint Secretary, Culture Ministry | Reportedly still serving when chargesheet was filed |
| Aviation Official | Sanjeev Gautam | Former CAAN Director General | Previously named in related chargesheets |
| Project Official | Pradip Adhikari | Project Director | Worked under National Pride Project designation |
| Technical Official | Yogesh Aryal | Electronics Engineer | Former Culture Ministry official |
| Finance Official | Yugraj Pande | Former Under-Secretary | Finance Ministry official |
| Finance Official | Urmila Bhandari | Former Section Officer | Finance Ministry official |
| Contractor | China CAMC Engineering Co., Ltd. | Contractor Company | Named as defendant |
| Contractor Executive | Wang Bo | Chairman | Named in chargesheet |
| Contractor Executive | Yang Zhigang | Project Manager | Named in chargesheet |
The CIAA charges the Chinese company and its executives as abettors under Section 22 of the Prevention of Corruption Act, 2059 (2002), seeking punishment equivalent to that of the principal Nepali offenders. The Nepali officials face charges under Sections 3 and 17 of the same Act, with additional punishment sought under Section 24 for the more senior among them.
How the Tax Waiver Scheme that Allowed
“Double Benefit” Worked
The CIAA’s central allegation rests on a deliberate bifurcation of contractual instruments. The commercial contract between CAAN and China CAMC — the foundational agreement governing the airport’s construction — priced the project at a level that incorporated taxes, duties, and applicable charges as the contractor’s liability, in keeping with Nepal’s prevailing legal framework. This is a standard feature of public procurement contracts in Nepal, which require contractors to discharge their fiscal obligations to the state as a condition of contract performance.
The accused, according to the CIAA, subsequently engineered a separate Implementation Agreement that effectively nullified this arrangement without correspondingly revising the contract price downward. China CAMC continued to receive payment at the original contracted amount — which included the tax component — but was no longer obligated to remit those taxes to the treasury.
The contractor thus received full compensation for a cost it no longer incurred, while the Nepali exchequer bore the loss of Rs 3.62 billion. As IANS reported on May 7, 2026, the anti-graft body described this as the contractor receiving a “double benefit” — an exemption from payment on one hand, and retention of the payment-equivalent on the other.
The Fourth Case in a Widening Prosecution: How This Chargesheet Fits the Broader Scandal
The May 7 chargesheet is the fourth in a series of prosecutions the CIAA has filed against different clusters of defendants over the past year and a half. All of these four cases address a distinct dimension of the Pokhara airport’s alleged misappropriation.
The first and largest chargesheet, filed on December 7, 2025, named 55 individuals — including five former ministers and ten former secretaries — alongside China CAMC Engineering, alleging that the defendants colluded to inflate construction costs by at least USD 74.34 million.
As the South China Morning Post reported, the CIAA sought approximately Rs 8.36 billion in damages from each of the 56 defendants, making it the largest corruption case ever filed at the Special Court in terms of financial magnitude under a state procurement process. A week after that filing, a separate case was registered against former CAAN Project Director Binesh Munankarmi over assets disproportionate to known income.
The third chargesheet, filed on March 21, 2026, charged 21 individuals — including two Chinese officials — over the misappropriation of Rs 461.58 million linked to consultancy services. As The Kathmandu Post reported, a provisional sum of USD 2.8 million allocated under the EPC contract for consultancy purposes was almost entirely diverted, with only USD 10,000 spent for its intended purpose, the remainder channelled through a separate CAAN budget in violation of procurement law.
The fourth case, now focusing on the tax waiver mechanism, brings the cumulative financial demands of the four chargesheets to a staggering aggregate, and elevates the total number of individuals prosecuted in connection with the Pokhara airport to well above 80.
Pokhara Airport is Yet to Attract Scheduled International Flights
Pokhara Regional International Airport, inaugurated by then-Prime Minister Pushpa Kamal Dahal on January 1, 2023, was projected to handle approximately 280,000 international passengers annually by 2025, according to a 2014 feasibility study commissioned by CAMC itself. As of 2026, the airport operates at most one weekly international flight to Lhasa, and no scheduled international passenger services otherwise operate from the facility.
Initially, three Chinese state-affiliated firms submitted bids for the construction of Pokhara International Airport, with China CAMC’s lowest offer coming in at USD 305 million — more than double the government’s initial estimate. After prolonged controversy and negotiation, an independent expert committee settled on a contract value of USD 215.96 million in 2013, and CAAN formally signed the revised agreement with CAMC.
The airport was financed through a concessional loan from the Export-Import Bank of China, with approximately 25 percent of the loan interest-free and the remaining 75 percent at an annual rate of 2 percent, repayable over 20 years with a seven-year grace period. Nepal’s Finance Ministry on-lent the proceeds to CAAN at 5 percent interest. The government of Nepal formally requested China Exim Bank in August 2024 to convert the loan into a grant, a request that Beijing has so far declined. Fears are that Pokhara Airport might turn into China’s debt trap.
With loan repayments now commencing in 2026 — and the airport generating insufficient revenue to service even its operating costs — the financial liability of the project weighs directly on the Nepali state.
Madan Krishna Sharma, president of Transparency International Nepal, was quoted by the South China Morning Post as stating that the CIAA had been politically constrained from acting sooner:
“The CIAA should have filed the case a long time ago, but it’s doing so now mainly because of the lack of political interference in this interim government.”
Nepal ranks 107 out of 180 countries in Transparency International’s Corruption Perceptions Index, and the airport scandal has become the most visible test case of whether the country’s anti-corruption institutions can sustain accountability without political interference reasserting itself.
China’s Position and the Diplomatic Dimension
China has not remained a passive subject of these proceedings. When the first major chargesheet was filed in December 2025, outgoing Chinese Ambassador Chen Song — who was in the final weeks of his posting — raised the matter directly with interim Prime Minister Sushila Karki during a farewell call.
According to officials familiar with the meeting, as reported by The Kathmandu Post, the ambassador urged the prime minister to prevent Chinese entities from being implicated, asserting that under Chinese law, a state-owned enterprise such as CAMC cannot by definition be involved in corruption. Prime Minister Karki reportedly replied that the CIAA operates as an independent constitutional body and that her government lacked the authority to intervene in its proceedings.
China CAMC, for its part, had earlier rejected the parliamentary Public Accounts Committee’s subcommittee report — which preceded the CIAA’s investigations — as, in the company’s own words quoted in The Annapurna Express, “riddled with factual inaccuracies” and deficient in professional and objective analysis.
The company stated it had strictly complied with all legal and regulatory requirements of the Nepalese government throughout the bidding, contracting, and implementation phases. CAMC has not issued a public response to the most recent chargesheet as of the time of this report’s publication.
Possible Penalties and the Seriousness of the Charges
The CIAA’s sentencing demands in the fourth chargesheet signal the gravity with which the anti-graft body treats the tax waiver mechanism. The Nepali public officials face imprisonment under Sections 3 and 17 of the Prevention of Corruption Act, 2059, along with fines equivalent to the full misappropriated amount of Rs 3.62 billion.
For the more senior accused — including the former finance minister — the CIAA seeks additional punishment under Section 24, which provides for aggravated penalties commensurate with the seniority of office and degree of culpability. China CAMC Engineering and its two named executives face punishment as abettors under Section 22 — equivalent in quantum to the sentences sought against the principal Nepali offenders.
This sentencing structure reflects a deliberate prosecutorial design: the CIAA treats the contractor’s executives not as peripheral beneficiaries but as co-architects of the scheme. The legal classification of Wang Bo and Yang Zhigang as abettors — rather than merely as recipients — is legally significant, establishing in the chargesheet’s logic that the tax exemption arrangement required active participation from the contractor side to be executed.