How PM Oli’s Oligarchs are Looting Nepal: A Deep Dive into Corruption, Cronyism, and the Erosion of Public Trust

Yeti Holdings: A Web of Favoritism

Yeti Holdings, owned by the late Ang Tshering Sherpa, has been at the center of allegations of benefiting from its connections with PM Oli. The company, known for its aviation and hospitality ventures, has secured several leases on valuable public assets managed by the Nepal Trust, often at rates significantly below market value. These transactions, marred by legal irregularities and opaque processes, have been dubbed the “Baluwatar real estate heist,” referencing Oli’s official residence and the perceived favoritism. Critics argue that these deals, costing the state billions, reflect a pattern of cronyism, with political influence overriding transparency and accountability.

Gokarna Forest Resort: A Sweetheart Deal

The Gokarna Forest Resort deal is a flagship example of alleged favoritism. In December 2019, the government extended the lease to Yeti Holdings for another 25 years, six years before the current lease was set to expire in 2025 (myRepublica - Yeti Holdings secures 25 year lease extension). This decision, made during a cabinet meeting, lacked open competitive bidding, raising concerns about transparency. Reports suggest the rental rate was substantially below market value, though exact figures are not publicly detailed.

Adding to the controversy, Yeti Holdings acquired 100% of the resort’s shares in 2014 from LM Suvir Brothers, breaching the original 1996 agreement that required LM Suvir Brothers to hold at least 51% ownership (myRepublica - How Yeti Group benefited). This acquisition was facilitated by a decision from the Nepal Trust’s Executive Committee Board on February 9, 2014, allegedly under political influence from the Sherpa family, known for their close ties with Oli. Advocate Kedar Karki has called the deal illegal, yet there has been no significant legal pushback, suggesting political interference in judicial oversight.

Government officials, including PM Oli, defended the extension, arguing it was necessary to allow infrastructure development and prevent the land from turning into a pasture, as claimed by Nepal Trust’s joint secretary Rajeshwar Gyawali (OnlineKhabar - Extended Gokarna Resort lease). However, critics, including opposition MPs, demanded clarification, highlighting the lack of transparency and potential policy-level corruption (myRepublica - MPs demand clarification).

Durbarmarg Land: A Multi-Billion Rupee Loss

Another contentious deal involves prime land in Durbarmarg, an upscale area near the Narayanhiti Royal Palace. Yeti Holdings, through its sister company Thamserku Trekking, secured a 30-year lease for 1 ropani and 14 ana of land at an annual rent of Rs 5 million, as reported in November 2019 (myRepublica - Annual rent of Durbarmarg land). This rate is considered extremely low, with shop owners in the area paying an average of Rs 400,000 for one shop, highlighting the undervaluation.

The 77th report of the Auditor General, cited in December 2019, deemed the transaction illegal, noting a staggering Rs 5.5 billion loss to the national treasury (myRepublica - How Yeti Group benefited). A committee had recommended leasing the land for Rs 6.45 billion, but the final contract was signed for Rs 1.49 billion, including the cost of a new building. Despite these findings, the Commission for the Investigation of Abuse of Authority (CIAA) cleared the deal, a decision many view as evidence of political interference. The Nepal Trust Act was amended on March 3, 2019, 21 months after the agreement, to allow tourism and business use, deepening suspicions of tailored legislation benefiting connected firms.

Legal challenges emerged, with Patan High Court halting construction in January 2020 following a writ petition by advocate Parivartan Rai, challenging the lease at a “throwaway price” (myRepublica - Court halts Yeti Holdings construction). However, the lack of follow-through suggests ongoing issues with enforcement, with critics arguing the CIAA’s clearance reflects judicial capture.

Pasang Lhamu Foundation: Public Land for Party Gain

The Pasang Lhamu Foundation, established by the Sherpa family in memory of Pasang Lhamu Sherpa, the first Nepali woman to summit Everest, has been embroiled in controversy over its use of state land. In 2006, the government allocated 4 ropani 5 ana of land to the foundation, which was later used by the CPN-UML (now part of NCP) as their party headquarters after the 2015 earthquake damaged their previous office in Balkhu (myRepublica - NCP head office housed illegally).

This arrangement violates Clause 21 of the Political Parties Related Act 2073 BS, which prohibits political parties from using public or community-owned property. Advocate Om Prakash Aryal condemned it as illegal, arguing that such property cannot be used for purposes other than originally stated. The foundation’s close ties with PM Oli, evidenced by appointments like Kripasur Sherpa as minister in 2072 BS upon Oli’s recommendation, suggest political influence. Despite a public notice in 2074 BS from the Department of Land Management to change titles, the foundation ignored it, banking on its excellent relations with the government, highlighting the challenges in enforcing legal norms against politically connected entities.

Ang Tshering Sherpa Gumba: Oli’s Direct Hand

In Lumbini, PM Oli is accused of personally directing the allocation of 14 ropani of land to the Ang Tshering Sherpa Gumba, bypassing legal norms. As the patron of the Lumbini Development Trust, established in 1985 to manage Buddhist sites, Oli’s involvement suggests a conflict of interest, prioritizing personal or political allies over public welfare. While specific details are less documented in recent reports, the allegation aligns with patterns of favoritism seen in other deals, with critics arguing it breaches trust management laws. The lack of transparency in such allocations underscores concerns about governance, though further verification is needed due to limited public information.

Narayanhiti Royal Palace Restaurant: Thamserku’s Slice

Thamserku, a sister company of Yeti Holdings, secured rights to operate a restaurant within the Narayanhiti Royal Palace, facilitated by a development committee at the company’s request. This deal, reported in 2019, lacked transparent bidding processes, illustrating how public heritage sites are being parceled out to connected entities (Nepali Times - The business of politics undermines Nepal’s democracy). Recent reports, however, mention BPS Leasing and Management as the operator, with construction stalled in January 2022 due to legal and public backlash (Nepalnews - Construction of restaurant inside Narayanhiti stalled). This suggests possible changes in operators or ongoing disputes, with the Ministry of Culture forming a committee to study legality, reflecting ongoing controversy.

Broader Implications and Public Response

These deals highlight a pattern of cronyism, with significant financial losses and erosion of public trust. Public outrage, particularly online, has demanded accountability, with MPs seeking clarifications and courts intervening in some cases. However, inconsistent legal responses, like CIAA’s clearance of Durbarmarg, suggest systemic challenges. As of April 15, 2025, these issues remain contentious, with calls for reform to ensure transparency and protect public assets.

Economic Fallout: Quantifying the Cost of Corruption

The financial cost of corruption in Nepal is staggering, with billions of rupees lost to undervalued leases and corrupt practices, diverting funds from critical public needs. Specific cases, such as the Durbarmarg land deal, resulted in a Rs5.5 billion loss to the treasury, as highlighted by the Auditor General, funds that could have supported infrastructure like roads, hospitals, and schools, essential in a country where infrastructure development lags. The World Bank's Nepal Development Update for April 2025 (Nepal Development Update) notes a nonperforming loan (NPL) ratio of 4.9%, a surge attributed partly to corrupt lending practices, where loans are granted based on bribes rather than creditworthiness, leading to defaults and financial instability.

Corruption distorts economic decision-making, leading to inefficient resource allocation. This inefficiency is evident in the World Bank's report, which warns of risks from further deterioration in financial sector asset quality, potentially tightening private sector credit and slowing economic growth. Nepal’s projected real GDP growth of 4.5% for FY25, up from 3.9% in FY24, is commendable, but corruption likely hinders faster growth, as it deters foreign investment. The country’s continued presence on the FATF Grey List, as mentioned in the report, presents a substantial risk, restricting access to international financial markets and increasing capital costs. This, combined with persistent power shortages and bureaucratic hurdles, makes Nepal a risky bet for investors, stifling job creation and perpetuating economic underdevelopment.

Social Erosion: The Human Cost of Mistrust

The social impact of corruption is profound, with public trust in government institutions significantly eroded. The Nepal National Governance Survey 2017/18, analyzed with an ordered logit model, reveals low trust in political institutions, with mean scores for ministers, political parties, and parliamentarians around 2.3 on a scale from 1 to 4, indicating dissatisfaction with performance and actions (Citizen's Trust in Public and Political Institutions in Nepal). Recent reports, such as those from Khabarhub (Public trust in the state is waning) and Nepal Monitor (Nepal’s Political Future Under Scrutiny), suggest this trend persists, fueled by ongoing corruption scandals and political instability.

This erosion breeds cynicism and apathy, reducing civic engagement and participation in democratic processes. The selective enforcement of justice, where some officials face consequences while others, like Krishna Bahadur Mahara, evade accountability despite bribery allegations, exacerbates feelings of injustice. A study on local governments’ accountability and public trust in Nepal (Local governments’ accountability and public trust in Nepal) found that transparency, responsiveness, and public participation are significant predictors of trust, with public participation positively moderating the relationship between accountability and trust. However, the lack of these elements in current governance practices deepens mistrust.

Social inequality widens as corruption concentrates wealth among a small elite, leaving many in poverty. This disparity hampers social mobility, perpetuating cycles of disadvantage, particularly for marginalized communities like Dalits and Janajatis, as noted in the Global State of Democracy report (Nepal | The Global State of Democracy). The risk of social unrest is heightened, with reports of growing frustration and potential for protests, as seen in recent disturbances mentioned in Khabarhub, signaling a populace nearing its breaking point.

Long-Term Risks: A Nation at Risk of Stagnation

If corruption continues unchecked, Nepal faces severe long-term risks, potentially trapping the country in a cycle of underdevelopment. Economically, Nepal lags behind neighbors like India and Bhutan, with GDP per capita figures for 2023 at $1,200 for Nepal, compared to $2,400 for India and $3,500 for Bhutan, according to World Bank data. This gap is likely to widen, given corruption’s impact on investment and growth, as highlighted in the East Asia Forum article, which notes 68% of Nepalis believe the country is heading in the wrong direction (Corruption and crisis define Nepal’s 2024).

Politically, the loss of faith in democracy and the rule of law could lead to instability, with indications of potential movements, including calls for the former king’s reinstatement, as mentioned in the same article. This could destabilize the fragile political order, leading to further chaos. Corruption also exacerbates brain drain, with skilled professionals leaving for better opportunities abroad, hindering innovation and development, as noted in opinion pieces from the Kathmandu Post (Corruption in emerging democracies).

The long-term scenario includes increased poverty and inequality, reduced human capital, and a weakened state capacity to respond to challenges like climate change and natural disasters, as seen in the World Bank’s report on flood damages equivalent to 0.8% of GDP in H1FY25. Without addressing corruption, Nepal risks becoming a case study in failed governance, unable to leverage its potential in hydropower and tourism for sustainable growth.

Public and Legal Response: A System Under Strain

Public outrage over corruption has been palpable, particularly on social media, with viral campaigns demanding accountability for high-profile scandals like PM Oli’s lavish birthday bash and real estate deals involving Yeti Holdings. The East Asia Forum article mentions fund misappropriation cases by executives and popular leaders gripping society in 2024, reflecting ongoing public discontent (Corruption and crisis define Nepal’s 2024). However, the legal response has been inconsistent, with some officials, like Gokul Baskota, resigning after a kickback scandal in 2020, while others, like Krishna Bahadur Mahara, evade consequences despite bribery allegations, as noted in previous reports.

The Commission for the Investigation of Abuse of Authority (CIAA) faces criticism for selective enforcement, as seen in the clearance of the Durbarmarg lease deal despite the Auditor General’s findings, prompting accusations of judicial capture. Recent news, such as the Tax Settlement Commission scandal involving Rs10.02 billion, highlights the scale of corruption but also the challenges in prosecution (Biggest corruption case in Nepal’s history). Protests have emerged, though not yet at a revolutionary scale, with simmering frustration signaling potential for escalation, as noted in Nepal Monitor’s reports on political reform proposals.

Conclusion: A Call for Comprehensive Reform

The allegations against PM Oli’s oligarchs—from corruption and real estate grabs to ostentatious displays—paint a grim portrait of a nation exploited by its leaders. The economic fallout, with billions lost and investment deterred, combined with social erosion, where public trust is at a low, underscores the urgency for action. Long-term risks, including underdevelopment and political instability, loom large if these trends continue.

To address this, Nepal needs robust legal reforms, including strengthening the CIAA to ensure independence and effectiveness, as recommended in studies like the Economic Journal of Nepal (Impact of Corruption on Economic Growth in Nepal). Increasing transparency in government dealings, particularly in public procurement, and promoting public participation, as supported by the Wiley study on trust, are crucial. International support, as suggested in South Asian Voices (Major Corruption Scandal in Nepal Exposes Deep-Rooted Kleptocracy), could pressure the government to act decisively. Without bold action, the looting risks not just resources but the very soul of a nation yearning for progress.