KATHMANDU: The investigation into the property auction case of Smart Telecom Pvt. Ltd. has focused towards the telecommunication service provider company, Ncell. The Central Investigation Bureau (CIB) of Nepal Police has initiated an investigation against Ncell under the suspicion that illegal activities took place in Smart’s property auction process.

In this connection, the CIB requested documents from Ncell’s corporate office located at Nakkhu, Lalitpur, on May 14.

According to the Bureau, the investigation had to be initiated because Ncell’s involvement in the Smart Telecom property auction case is suspicious.

The Telecommunications Act, 1997 contains a provision stating that after the expiration of the license period of a company operated with permission from the Nepal Telecommunications Authority, its ownership shall belong to the Government of Nepal. However, CIB officials claim that after Smart Telecom’s license was revoked, its ownership reached Ncell without the Telecommunications Authority even knowing about it. “According to the Telecommunications Act, the assets of Smart Telecom should belong to the Government of Nepal,” says CIB Spokesperson, Senior Superintendent of Police (SSP) Shiva Kumar Shrestha, “Without giving any information to the Authority, the ownership of Smart Telecom has reached Ncell; assets that should have come under government ownership have been illegally sold to another company.”

To recover its loan, Nepal Investment Mega Bank (NIMB) had auctioned the assets of Smart Telecom. The bank published the notice for the said auction on September 19, 2025. Ncell accepted (acquired) Smart’s assets on October 6. “Based on information that irregularities occurred with the bank also being involved in the process of Smart Telecom’s assets reaching Ncell, we have started an investigation against Ncell,” SSP Shrestha says, “Currently, a preliminary investigation has been initiated by taking the documents; after a detailed investigation, other individuals involved in such acts will be identified.”

The CIB alleges that Ncell arranged a ‘setting’ (collusion) with NIMB through the then-political power centers at the time of Smart Telecom’s asset auction. The CIB claims that the then high-ranking individuals connected to the case will come under the scope of the investigation.

Smart Telecom started expanding services across the country after obtaining permission from the Telecommunications Authority on April 15, 2013. A company operating telecommunication services is granted a license for a maximum of 25 years. Initially, the license is given for 10 years, and thereafter, renewals are done every five years based on the company’s application. However, Smart did not renew its license after completing 10 years. Due to this, Smart’s license was automatically revoked starting April 16, 2023. According to the Bureau, after its license was revoked, Smart did not even submit an application to the Authority to sell or transfer rights to anyone in any other manner. If such an application had been submitted and found reasonable, the Authority could have given permission to start the sale or transfer process. However, Smart did not go through that process.

According to the Telecommunication Service Provider Asset Management Regulation, 2022, when assets are sold through an open auction, the company that failed to renew its license and its investors are not allowed to participate. Therefore, the CIB claims that Smart Telecom’s asset auction process is not legally compliant.

Attempts to contact Ncell’s Corporate Communications Officer, Ramesh Shrestha, multiple times were not successful.

Who is in custody?

The CIB alleges that a ‘setting’ took place at Investment Mega Bank to hand over Smart Telecom’s assets to Ncell. In connection with this case, the CIB arrested the Chief Executive Officer (CEO) of the bank, Jyoti Prakash Pandey, from Kamalamai Municipality-6 of Sindhuli on the night of May 13.

Pandey was released the very next day by an order of the Supreme Court. The court freed Pandey from custody, stating that the recovery of Smart Telecom’s collateral and debt was a “banking process.” Police had arrested Pandey for offenses of fraud and criminal breach of trust under the National Penal Code, 2017.

In this case, Smart Telecom’s Chairman Sarvesh Joshi, Transtech company’s director Palina Shrestha, and Narendra Ulak have already been arrested. Ulak is accused of colluding with the bank during Smart’s asset auction process.

Transtech and Professional Business Network, companies associated with Shrestha, had participated in Smart Telecom’s asset auction process. The operator of the Professional company is currently absconding. Joshi, Shrestha, and Ulak are in CIB custody.

Bank and Ncell, along with three companies, under investigation

Three companies competed when Smart Telecom’s assets were auctioned. According to the CIB, among the three companies, Ncell made the highest bid. It appears that Smart’s assets went under Ncell’s ownership from Nepal Investment Mega Bank for Rs. 4.60 billion.

The questions raised by the CIB regarding the auction process are not limited only to the difference in bid amounts. The CIB claims that the bank set up two companies as ‘dummies’ just to show competition in the auction. According to the CIB, Transtech company bid only Rs 450 million and Professional Business Network bid only Rs 420 million. Since the bid amounts differed unnaturally, the police claim that the bank set up both companies as ‘dummies’.

On the other hand, Smart Telecom had a liability to pay Rs 27 billion to the government, including renewal fees, the Rural Telecommunications Development Fund, and frequency fees.

The CIB stated that the investigation is also being pushed forward from the angle of whether a ‘transaction’ took place to hand it over to a private company due to the large arrears owed to the government and complications related to renewal in the Smart case.

According to the CIB, it appears necessary to conduct a detailed investigation into the chain of decisions from determining the auction price, the actual capacity of participating companies, the guarantee process, up to the final approval in this case.

Also read:

Everything You Need to Know About the SmartCell Scandal