KATHMANDU:  In Nepal, an escalating wave of corruption scandals has gripped the headlines, fueling political tensions and threatening to undermine the stability of the country’s already fragile democracy. On April 8, 2025, rallies organized by the Rastriya Prajatantra Party (RPP) in Balkhu, Kathmandu, were a clear signal of rising political tensions, with calls for the restoration of the monarchy and Hindu state. Amidst the political fervor, a striking detail emerged: T-shirts worn by young RPP leader Khusbu Oli, emblazoned with references to the country’s most infamous corruption cases. One of the most glaring examples of such corruption is the multi-billion rupee wide-body aircraft purchase scandal.

The deal in question involved the purchase of Airbus A330-200 jets by Nepal Airlines, intended to modernize the national carrier and elevate Nepal’s aviation profile on the global stage. Instead, the acquisition has become emblematic of government mismanagement, financial recklessness, and deep-rooted corruption. Despite a final court order, the investigation into the scandal has been mired in delays, with the public still waiting for certification of the final findings. Even the Special Court, which oversees such cases, has raised concerns about the integrity and thoroughness of the inquiry, casting doubt on the impartiality of the investigation.

At its core, the wide-body aircraft corruption scam is part of a broader pattern of systemic corruption that stretches throughout Nepal’s political and bureaucratic elite. High-ranking politicians, former ministers, senior bureaucrats, and other stakeholders have all been implicated in a web of fraudulent activities. Here is everything you need to know about Nepal’s wide-body corruption scandal:

What is the Wide-Body Corruption Scandal in Nepal?

The Widebody Corruption Scandal is one of Nepal’s most debated and notorious corruption cases, centered around the procurement of two wide-body aircraft by Nepal Airlines Corporation (NAC). The scandal gained prominence after the NAC acquired the first aircraft on June 28, 2017, and the second on July 26, 2017. However, what seemed like a significant step toward modernizing Nepal’s national carrier soon became a symbol of financial mismanagement and corruption.

The scandal unfolded during the tenure of K.P. Oli’s government, when the NAC Board of Directors, led by Sugat Ratna Kansakar, decided to purchase the two wide-body planes. The plan was to procure aircraft with a maximum takeoff weight (MTOW) of 242 tons, ensuring better capacity and range for long-haul flights. However, the final purchase deviated from the original specifications, as the NAC acquired planes with an MTOW of just 230 tons. This change significantly reduced the aircraft’s capacity, impacting the airline’s ability to operate long-distance international flights, contrary to the business plan initially laid out.

The procurement process came under intense scrutiny, and the Public Accounts Committee (PAC) conducted an investigation. In 2018, the PAC concluded that the NAC had suffered a loss of Rs 4.35 billion due to the flawed decision-making and changes in the aircraft specifications. This investigation revealed that the financial and operational benefits expected from the planes were severely compromised by these alterations.

The involvement of key political figures exacerbated the scandal. After the Oli government was replaced by a coalition led by Pushpa Kamal Dahal in August 2016, the new government upheld the decision to purchase the aircraft. The Commission for the Investigation of Abuse of Authority (CIAA) accused Jeevan Bahadur Shahi, the tourism and civil aviation minister in the Dahal-led government, of being complicit in altering the aircraft specifications, which restricted their potential for long-haul flights.

To finance the deal, the Dahal-led government took a loan of Rs 24 billion from the Employees Provident Fund and the Citizens Investment Fund, burdening public pension funds. Despite these concerns, the planes arrived in Kathmandu in 2018, during the second term of the Oli government, highlighting the ongoing political influence on the decision-making process.

The widebody scandal continues to raise questions about the governance and transparency within Nepal’s public procurement processes, with significant implications for public trust in state institutions.

 How Wide-body Corruption Scandal unfolded?

In 2017, Nepal Airlines, the state-owned carrier of Nepal, took a monumental leap forward by purchasing two Airbus A330-200 widebody jets. The deal, which was valued at $216.38 million, was meant to mark a new era for the airline, allowing it to connect Nepal to Europe, Australia, and beyond, and enhance its standing in the international aviation market. The government heralded the purchase as a milestone in Nepal’s aviation history, signaling modernization and growth for the national carrier. But beneath the glittering promises of progress lay a darker story—one of international corruption, shady intermediaries, inflated costs, and a financial burden on the nation’s citizens.

By 2023, the deal had turned into a nightmare, with Nepal Airlines burdened by a staggering debt of Rs 31.4 billion, far exceeding the original loan amount. This debt had been financed by two major pension funds—Citizens Investment Trust (CIT) and Employees Provident Fund (EPF), both of which manage the hard-earned savings of millions of Nepali workers. The financial consequences were felt most acutely by the country’s citizens, who found themselves shouldering the cost of what had been touted as a national achievement. As the debt soared, it became clear that the jets, instead of being a symbol of progress, had become a financial albatross around the necks of ordinary Nepali.

How did the national dream of a modern airline turn into a financial nightmare?

The vision for the new Airbus jets was simple. Nepal Airlines, struggling with outdated aircraft, was poised to take a major leap forward in its quest for a more competitive, modern fleet. The A330-200s were designed to replace the aging Boeing 757s and allow Nepal Airlines to fly longer international routes, including direct flights to European cities and Australia. With the arrival of the jets, the airline would no longer be confined to regional routes but would join the ranks of international carriers, elevating Nepal’s connectivity and opening new doors for tourism and trade.

However, this dream quickly soured. The promised international routes failed to materialize, and the aircraft, which were initially welcomed with grand ceremonies, turned out to be an expensive and impractical investment. The airline faced major challenges in maintaining the new fleet, with high operational costs and frequent technical issues. These setbacks were compounded by a lack of skilled staff and infrastructure to handle the advanced technology of the Airbus A330s. Rather than contributing to the airline’s profitability, the jets became a drain on its finances.

In the years following the purchase, it became clear that the decision to buy these jets had been financially disastrous. The airline’s revenue generation from the jets failed to meet expectations, and Nepal Airlines struggled to cover the operational costs of its new fleet. The hope that the purchase would enhance the country’s aviation sector and generate profits was quickly dashed, leaving the public to pick up the tab.

Who were the shadowy figures behind the wide-body deal?

Central to the controversy surrounding the purchase was the involvement of various intermediaries, which raised questions about the transparency of the deal. Instead of negotiating directly with Airbus, Nepal Airlines used a series of intermediaries based in Moldova, Portugal, and Germany. This unusual structure inflated the cost of the jets, with some reports suggesting that the price paid for the two Airbus A330s was far above the market value.

At the core of this murky web of intermediaries was German Aviation Capital, a company founded by Victor Topa, a Moldovan businessman with a controversial past. Topa’s company had previously been involved in questionable deals, including facilitating a sale of Airbus aircraft to Iran, which violated international sanctions. His ties to high-level figures in the aviation industry raised eyebrows, especially when it was revealed that he had been linked to senior Airbus executives who had been dismissed after a bribery scandal.

Another major figure was Paulo Mirpuri, the owner of Hi Fly, a Portuguese airline. Mirpuri had cultivated a reputation as a vocal environmentalist and opponent of plastic waste. However, his political connections raised questions about his role in the deal. His airline had also been involved in controversial contracts with the UK Home Office to deport migrants, which had drawn criticism from human rights groups. These associations with high-profile figures in the aviation and political worlds made Mirpuri’s involvement in the deal all the more suspicious.

The third key player was AAR Corp, a large aviation services company based in Illinois. AAR Corp, which had reportedly made substantial profits from the deal, later self-reported potential violations of the Foreign Corrupt Practices Act to US authorities in 2019. While no formal charges were filed, the company’s involvement in the deal was controversial, especially given its history of operating in Nepal and other countries with high corruption risks.

Why did Nepal Airlines pay millions more than it needed to?

One of the most significant concerns surrounding the deal was the inflated price of the jets. According to a report by Nepal’s parliamentary committee in 2019, Nepal Airlines had overpaid by at least $40 million for the two Airbus A330s. The committee’s investigation revealed that if the airline had dealt directly with Airbus, it could have secured the jets for a much lower price, bypassing the unnecessary intermediaries that inflated the cost.

This revelation was a major blow to the government’s narrative of fiscal prudence and sound decision-making. Instead of securing a deal that was financially beneficial for the country, the Nepali government had paid millions of dollars more for the jets, much of which ended up in the pockets of intermediaries with questionable reputations. This discrepancy raised serious doubts about the motives of those involved in the deal and cast a long shadow over the integrity of the procurement process.

What role did the Nepali Government play?

The government’s role in the deal was crucial. Nepali officials, including former ministers of tourism and civil aviation, were instrumental in approving the purchase of the jets. While the government had previously insisted that the purchase was made with the best interests of the country in mind, the ongoing financial fallout suggests that due diligence was either lacking or ignored.

Despite clear signs of financial mismanagement, Nepali authorities have been slow to act on the allegations of corruption. Investigations into the deal have been bogged down by bureaucratic inertia, and there has been little public accountability for the officials involved in the procurement process. The lack of a clear response from the government has fueled public frustration and raised concerns about the country’s ability to combat corruption at the highest levels.

What was Airbus’s role in the scandal?

While the focus has largely been on the role of intermediaries and Nepali officials, the involvement of Airbus in the scandal cannot be ignored. The European aerospace giant, which manufactures the A330-200 jets, has a history of corruption scandals. In 2020, Airbus was fined $4 billion by the US Department of Justice for bribing officials in several countries, including Nepal, in exchange for aircraft sales.

Although the company has not been directly implicated in the Nepal deal, the broader context of Airbus’s questionable business practices raises serious concerns about the integrity of the procurement process. Investigations into the company’s international operations have uncovered evidence of widespread bribery, and the connection between Airbus and Nepali intermediaries only deepens suspicions about the legitimacy of the deal.

How the Parliament Public Accounts Committee unmasked the NAC wide-body plane scandal?

In December 2018, Nepal’s Parliament Public Accounts Committee (PAC) subcommittee dropped a bombshell report detailing corruption amounting to Rs 4.3556 billion in the procurement of two wide-body planes for Nepal Airlines Corporation (NAC). This scandal unveiled layers of financial mismanagement and violations of procurement regulations, implicating senior government and NAC officials.

The scandal, one of the largest in Nepal’s aviation history, highlighted the systemic corruption that plagues public institutions. The subcommittee’s findings revealed that the malfeasance was not a one-man show but a well-orchestrated scheme involving key stakeholders at every stage of the procurement process.

The PAC subcommittee summoned nearly 50 individuals, scrutinizing the procurement of the Airbus A330-200 planes. What emerged was a narrative of deliberate price inflation, procurement irregularities, and policy violations. The subcommittee accused NAC officials of manipulating cost calculations to inflate the price of the planes. Instead of determining the price based on current market rates, officials calculated costs using eight-year-old prices and added an annual escalation, an approach that ensured inflated figures.

The report detailed how NAC accepted a proposal from AAR Inc, which priced each plane at $104.8 million—far above the estimated $93 million market value. Moreover, the planes procured had a maximum takeoff weight of 230 tons instead of the optimal 242 tons, resulting in additional losses of $8.4 million. The subcommittee also exposed irregularities in depreciation calculations and escalations, which compounded the financial misappropriation.

One of the most glaring violations was the NAC’s specification of a particular brand and engine type in its tender notice. By calling for Airbus A330-200 planes with Rolls-Royce Trent 772B engines, the NAC bypassed fair competition—contravening Nepal’s Public Procurement Act. Instead of procuring the planes directly from Airbus, the NAC dealt with a third-party agent, further raising suspicions about the motives behind the procurement process.

The report also pointed fingers at the Civil Aviation Ministry, questioning how such large-scale corruption could occur without the knowledge and involvement of senior government officials. PAC members called for action against Civil Aviation Minister Rabindra Adhikari and his two predecessors, emphasizing their potential complicity. However, internal conflicts within the subcommittee emerged, with some members refraining from recommending action against the ministers.

The NAC scandal raises broader questions about accountability and transparency in Nepal’s public institutions. While punitive actions against individuals provide a temporary sense of justice, structural changes are imperative to curb corruption. Strengthening procurement laws, enhancing oversight mechanisms, and ensuring political neutrality in investigations are crucial steps forward.

As Nepal grapples with the aftermath of the wide-body plane scandal, the case serves as a grim reminder of how systemic corruption undermines public trust and squanders national resources. The turbulence may have subsided for now, but the need for vigilance remains more critical than ever.

How did the CIAA file a case in Nepal’s Airbus A330 corruption scandal?

In April 2024, the Commission for the Investigation of Abuse of Authority (CIAA) filed a corruption case against 32 individuals, including former minister Jeevan Bahadur Shahi, in connection with the procurement of two Airbus A330 wide-body aircraft for Nepal Airlines Corporation (NAC). The CIAA, seeking Rs 1.47 billion ($13.39 million) from the accused, filed the case at the Special Court. Along with Shahi, the charges include former NAC general manager Sugat Ratna Kansakar and several former senior officials from NAC and the Department of Customs.

The procurement, which was meant to bolster the national carrier’s fleet, has now become a symbol of widespread corruption. It centers around a flawed procurement process that not only violated public procurement laws but also resulted in massive financial losses. Key figures from both the Nepali government and the international supply chain have been named in the case, including foreign nationals involved in supplying the aircraft.

In 2016, the NAC formed a sub-committee under Kansakar to oversee the procurement of the two aircraft. The government assured its support by providing a guarantee for the procurement. NAC subsequently published a 45-day notice to invite bids for two Airbus A330-200 planes, specifically asking for planes with Rolls-Royce Trent 772B engines that had flown at least 1,000 hours.

However, concerns were raised when it was revealed that the bidding process was tailored to favor a specific brand of aircraft. The Public Accounts Committee (PAC) investigation into the procurement process found that the specifications violated the Public Procurement Act by specifying particular brands and manufacturers. The PAC also noted that NAC had procured the aircraft through an agent rather than directly from the manufacturer, another violation of procurement rules.

The scandal intensified as it was discovered that NAC had procured planes with a maximum takeoff weight of 230 tons, despite the original plan calling for aircraft with 242 tons. The discrepancy resulted in a financial loss of Rs 4.35 billion, according to the PAC’s 2018 investigation.

As the case progresses in the Special Court, questions about the full extent of corruption, both within Nepal’s government and in the international supply chain, remain unanswered. The CIAA’s investigation has targeted several foreign nationals linked to the procurement, including representatives from AAR Corp, Hifly X Ireland Limited, and German Aviation Capital.

The aftermath of the scandal has raised concerns about the transparency and accountability of Nepal’s public procurement processes. With the case still ongoing, the outcome will likely have long-lasting implications on anti-corruption efforts in the country’s aviation sector and beyond.

What US Court documents reveal about the $2.5 million bribe in Nepal’s Airbus A330 deal

The $209.6 million Airbus A330 deal, which was hailed as the largest procurement in Nepal’s aviation history, has now become embroiled in a massive corruption scandal. US court documents recently uncovered a web of bribery and deception that allegedly involved Nepali officials, foreign intermediaries, and international aviation firms. These revelations have shaken the foundations of Nepal Airlines Corporation (NAC) and raised serious concerns about the integrity of the nation’s procurement processes.

At the heart of this scandal is Deepak Sharma, a former executive of AAR Corporation, a US-based aviation services provider. Sharma, a Nepal-born British citizen, played a pivotal role in securing the Airbus A330 deal for NAC in 2017, facilitating the sale of two wide-body aircraft. In July 2024, Sharma pleaded guilty in a US court to conspiracy charges under the Foreign Corrupt Practices Act (FCPA), which prohibits bribery by US companies in foreign markets.

According to court documents, Sharma conspired with other international figures to bribe Nepali officials, ensuring that the deal went in favor of AAR and its partners, including a German aircraft leasing company and Portuguese airline Hi Fly. As part of the plea agreement, Sharma agreed to forfeit approximately $130,000, although his sentencing is yet to be determined. This plea marked a significant development in a case that has spanned several years.

Between 2015 and 2018, Sharma and his co-conspirators orchestrated a plan to bribe Nepali officials to win a bid for the sale of two Airbus A330-200 aircraft to NAC. The bribes were funneled through a complex system involving bank accounts in the US, Ireland, and the UAE, disguised as legitimate business transactions. The court documents reveal that the total amount of bribes paid was approximately $2.5 million.

The conspiracy was carried out in secret, with communications among the conspirators detailing how to manipulate the bidding process. In one instance, Sharma sent a text message to a co-conspirator, boasting about his dinner with a senior evaluation committee member, where they allegedly discussed how to remove competing bids and secure the contract for AAR. These conversations, along with email exchanges and invoices, were later used as evidence in the case.

The payments were carefully concealed as business expenses, with sham invoices being issued by companies involved in the deal. For example, invoices from the German aircraft company’s subsidiary to AAR Corporation were falsely labeled as “advances” for services rendered, but in reality, these payments were used to fund bribes to Nepali officials.

The bribery scheme involved several high-ranking Nepali officials, including individuals who held prominent positions at Nepal Airlines during the procurement process. One of the key figures identified in the court documents is Foreign Official 1, a senior official at NAC who served from 2015 to 2019. Foreign Official 1’s involvement in the conspiracy is alleged to have played a critical role in ensuring the success of AAR’s bid.

According to the US Department of Justice’s court filings, Sharma and his co-conspirators made multiple wire transfers to accounts in the UAE and Ireland, which were used to bribe Foreign Official 1 and other Nepali officials. The court documents show how these officials were not only aware of the bribes but actively facilitated the process to ensure that AAR would win the contract.

One particularly revealing email exchange from 2016 showed Foreign Official 1 coordinating with Sharma to set tentative delivery dates that would disadvantage AAR’s competitors. “Almost all higher-ups are in our pocket,” Foreign Official 1 allegedly texted Sharma, underscoring the depth of the corruption.

The Airbus deal was initially intended to modernize Nepal Airlines’ fleet and improve the country’s aviation infrastructure. However, instead of ushering in a new era of aviation, it has left a trail of financial losses, political scandal, and public distrust in the country’s procurement processes. The loss of Rs 1.47 billion represents a significant blow to Nepal’s already fragile economy, and the ongoing legal battles may have lasting effects on the nation’s political landscape.

The case has also cast a shadow over Nepal Airlines, which is already struggling with mismanagement and financial instability. The scandal has raised important questions about the oversight of state-owned enterprises and the need for greater transparency and accountability in public procurement. As Nepal grapples with the fallout, the implications of this corruption scandal will likely continue to resonate throughout the aviation sector and beyond.

The $2.5 million bribe in the Airbus A330 deal has exposed the deep-rooted corruption in Nepal’s aviation industry and highlighted the vulnerability of state-owned enterprises to manipulation and exploitation. As the legal proceedings continue, the true extent of the corruption will likely come to light, and the implications for those involved could be far-reaching.

For Nepal, the scandal serves as a reminder of the need for stronger anti-corruption measures, better regulatory oversight, and a renewed commitment to transparency and accountability. Whether the guilty parties will face justice remains to be seen, but one thing is clear: the Airbus A330 deal will forever be remembered as a cautionary tale of how corruption can undermine public trust and tarnish a nation’s reputation.

Who were convicted in the Special Court’s verdict on the Airbus A330 corruption case?

On December 6, 2024, the Special Court of Nepal convicted 11 individuals, including four prominent officials, in a corruption case surrounding the purchase of two Airbus A330s for Nepal Airlines in 2017. The purchase, meant to modernize the national flag carrier’s fleet, has instead become a symbol of deep-rooted corruption within Nepal’s aviation industry, with the government allegedly losing Rs1.47 billion ($13.38 million) in the process. Yet, as the dust settles on this initial judgment, authorities suggest that the case remains far from closed. Investigations in Nepal and abroad continue, and the list of those potentially involved in the shady deal may yet grow.

At the heart of the scandal is Deepak Sharma, a Nepali-born British citizen and former executive at AAR, a U.S.-based aviation services provider that supplied the aircraft. In a major revelation, Sharma admitted to bribing Nepali officials as part of the deal, under the scrutiny of the U.S. Department of Justice. He pleaded guilty to violating the Foreign Corrupt Practices Act and agreed to forfeit $130,000, but his sentencing remains pending. Meanwhile, the Special Court has ordered Nepal’s Commission for Investigation of Abuse of Authority (CIAA) to initiate its own investigation into Sharma’s actions in connection with the aircraft procurement, keeping the case open for further developments.

The Special Court’s verdict handed down prison sentences and financial penalties to key figures involved in the deal. Sugat Ratna Kansakar, former managing director of Nepal Airlines, was sentenced to two years and nine months in prison and ordered to forfeit Rs122.59 million. Former tourism secretary Shankar Adhikari and finance secretary Shishir Kumar Dhungana received sentences of one year and nine months, with similar financial forfeitures. These convictions highlight the gravity of the scandal, but the court’s decision also underscores the complexity of international jurisdiction in such cases.

For some, the judgment raises more questions than answers. In addition to the convicted officials, several international figures were implicated, including Christian Nuehlen, Oleg Calistru, and others linked to AAR and its affiliates. They too were sentenced to prison and ordered to forfeit financial penalties. However, their whereabouts remain uncertain, as jurisdictional issues complicate efforts to bring them to justice. Gyanendra Raj Regmi, the spokesperson for the Special Court, notes that the Prevention of Corruption Act allows Nepali authorities to pursue cases involving foreign officials, but cooperation between countries is essential for effective prosecution.

One of the most controversial aspects of the case lies in the questionable procurement process itself. Investigators revealed that the officials involved accepted an escalation clause that allowed the price of the aircraft to rise by $6.78 million, even though the terms of the contract allowed for the purchase of second-hand jets. Furthermore, a crucial alteration in the aircraft’s maximum takeoff weight — reduced from 242 to 230 tonnes — was suspected to be a deliberate move to cover up financial embezzlement. The discrepancies between what was paid for and what was delivered amounted to a staggering $6.6 million.

Kansakar, described by the court as the mastermind of the scam, initiated the process in 2015 under the pretense of finding a more affordable solution for Nepal Airlines. Yet, a closer look at the procurement timeline raises serious doubts about the integrity of the process. From September 2016, when Nepal Airlines first solicited bids for the Airbus jets, to the final decision to purchase the aircraft, there were numerous irregularities. Documents disclosed by the U.S. court show that Sharma had close ties to key officials at Nepal Airlines, including receiving confidential information about the bidding process. In one email exchange, a Nepal Airlines official confided in Sharma about the planned schedule for signing the purchase agreement, even before the board members were informed.

Despite all this, the public announcement about the deal painted it as a cost-saving measure, with Kansakar claiming that the airline had found “cheaper planes.” The deal, however, became even more suspicious when it was revealed that Airbus — the proposed supplier — could not legally sell used planes under the agreed terms, further suggesting that the procurement was designed to facilitate corruption from the outset.

The trial’s verdict has raised significant concerns about accountability and the rule of law in Nepal. While the Special Court’s decision is a step forward, it has done little to resolve the larger question of how to tackle widespread corruption in the country. The continuing investigations, both in Nepal and abroad, hint at a deeper, more complex web of bribery and manipulation that may yet unfold.

“The rewards of political change in the country were reaped only by a handful of clever people. The mass never got to fully take advantage of it,” said Bhakta Kharel, an assistant professor at Tribhuvan University, reflecting the frustration felt by many who believe that justice is not being fully served. “Nepal’s laws are very weak, and until we change that, people will continue to get away with things.”

As the case continues to unravel, one thing is clear: the story of the wide-body aircraft deal is far from over. It is a cautionary tale of how corruption, when unchecked, can undermine national institutions and the trust of the people. And, in the face of mounting international scrutiny, the full truth may yet come to light — but only time will tell if those responsible will ever be held to account.

What lies ahead for Nepal Airlines?

By 2023, the fallout from the Airbus deal was undeniable. Nepal Airlines was mired in debt, and the pension funds that had financed the purchase were facing significant shortfalls. The burden of this failed deal has fallen on ordinary Nepali citizens, who trusted the government and these institutions with their savings. The deal, which was initially presented as a national achievement, has instead become a symbol of financial mismanagement and corporate corruption.

As the investigation continues, there is hope that those responsible for the deal will be held accountable, and that the public will finally learn the full extent of the corruption that surrounded the purchase of the Airbus jets. For the citizens of Nepal, the story of the jets is not just about bad business decisions—it is about the mismanagement of public funds, the betrayal of trust, and the failure of government institutions to protect the interests of the people they were supposed to serve.

This is a story of a corrupt deal that has had far-reaching consequences for the people of Nepal. As the investigation moves forward, the hope is that the truth will come to light, and those responsible will be held accountable for their actions. Only then can the public begin to rebuild trust in their institutions and ensure that such a fiasco never happens again.