Fate of a King: Poor and Powerless Overnight

By Ameet Dhakal
News Editor, the Kathmandu Post

gyanendra king of nepalThe Shah Kings, through royal decree, usurped power and amassed wealth umpteen times during the last 238 years. But today (15 Jan) people have turned the tables on the monarchy: By proclaming a constitution invoking their sovereign rights the people have made the reigning king both poor and powerless overnight.

The king will no longer act as head of state – let alone exercise any political power. Significantly, the constitution has also snatched away a major chunk of the royal assets. According to the interim constitution, property belonging to the late King Birendra will go into a trust and the property inherited by King Gyanendra by virtue of ascending the throne will be nationalized. But the king will continue to enjoy his private property, including his businesses. How much does the king own in business? Contrary to popular perception, The Kathmandu Post investigation revealed that he owns “very little”

The common perception that the king is “super rich” comes from an assumption that he owns a majority share in the Soaltee Group, which does not exist any longer. However, the investigation also revealed that he owned only a “miniscule” share in the Group’s businesses that expanded rapidly over last two decades. Before being dismantled in December 2005, the Group had nine business enterprises in its fold: Surya Nepal Pvt Ltd, Bhotekoshi Company Pvt Lt, Himal International Power Corporation, Sipradi Trading Pvt Ltd, Gorkha Lawrie Pvt Ltd, Himalaya Goodricke Pvt Ltd, Amaravati International Pvt Ltd, Maersk Nepal Pvt Ltd and Amaravati Travels Pvt Ltd. Out of these nine enterprises, Gorkha Lawrie was sold off in 2004.

Now a majority of these enterprises are owned and managed by Tara Management, which belongs to Prabhakar Sumsher Rana and his son, Siddhartha Rana. Records at the Office of the Company Registrar show that the king and his family own only 0.15 percent share in Himal International Power Corporation; 56 percent in Himal Goodricke, 40 percent in Soaltee Hotel and 10 percent in Surya Nepal Pvt Ltd.

But the king and his family have no share in Bhotekoshi Company Pvt Ltd, Sipradi Trading Pvt Ltd, Amaravati International Pvt Ltd, Amaravati Travels Pvt Ltd and Maersk Nepal Pvt Ltd. Among the enterprises that the king has a share in, both Soaltee Hotel and Himal Goodricke are currently loss making ventures. While Soaltee Hotel, a public limited company, hasn’t distributed any dividend for the last six years, Himal Goodricke has paid out about Rs 1.5 million as dividend during the last one decade. The only company that seems to be paying a significant dividend to the royal family is Surya Nepal. Last year it paid Rs 12.5 million to the family.

A source privy to King Gyanendra’s financial situation said, “The income from his [king’s] businesses is hardly enough to meet his expenses.” The source also said the king often withdrew dividends from the companies in advance. This claim has a lot of credence since officials at the Kaushitosh Khana – the office that disburses state sanctioned funds to the royal palace – also said the palace used to withdraw all annual allocations within 48 hours of the budget announcement till last year.

The source also claimed that King Gyanendra was neck deep in debt by the time he ascended the throne in June 2001. “In 2002, he sold 10 percent of his stake in Surya Nepal to Indian Tobacco Company Ltd and used the proceeds to repay his huge debt.” In terms of share capital, the king and his family have Rs 80 million worth of share capital in Soaltee Hotel; Rs 6.5 million in Himal Goodrick; Rs 33.6 million in Surya Nepal and Rs 250 thousand in Himal International Power Corporation.