The Central Investigation Bureau (CIB) of Nepal Police has confirmed that it is investigating Sujal Dairy Industry Pvt. Ltd. and its director, Anjan Shrestha, who is president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), as part of its inquiry into alleged financial irregularities at the Dairy Development Corporation (DDC).
The investigation began with the arrest of eight DDC employees on October 30, including former general manager Sanjeev Jha. The alleged irregularities total Rs 121,343,530, according to the preliminary findings. The investigation concerns Shrestha and Sujal Dairy, not the FNCCI as an institution.
The alleged scheme
The central allegation concerns payments for milk bought from farmers, cooperatives and farmer groups.
According to the CIB, records were manipulated to show larger purchases than were actually made, so that payments exceeding the real value of the milk were released.
Investigators say the excess was then brought back through cheques from the farms, cooperatives and groups, and divided among those involved.
The CIB gave a simple example: if the actual purchase payment was Rs 100,000 but Rs 200,000 was released, the Rs 100,000 excess would be returned by cheque and shared out. Investigators are also examining suspected manipulation of fat and SNF (solids-not-fat) records, which affect how much suppliers are paid.
The eight arrested are Sanjeev Jha, Bijay Kumar Yadav, Manhari Sharma, Ramkewal Raya, Jitendra Kumar Yadav, Nabin Raya Yadav, Shivanandan Raya and Bikh Bahadur Bhandari.
They are former or current staff of chilling centres and a powder milk factory. The CIB had raided DDC’s Lainchaur headquarters on May 27 and seized documents. The employees are being investigated under the National Penal Code, 2017, for criminal breach of trust, and under the Organised Crime Prevention Act, 2013.
Why Sujal Dairy is included
Sujal Dairy, which sells products under the Safal brand, previously bought dairy products, particularly butter, from DDC.
The CIB is examining allegations that payments for those purchases were not deposited into DDC’s accounts, and is trying to establish the period and total amount involved.
CIB chief Additional Inspector General Uma Prasad Chaturvedi said the investigation is continuing but that it is too early to disclose detailed findings.
The CIB is looking at DDC’s bank accounts, procurement and sales records, and its dealings with private dairies. The two lines of inquiry, the alleged manipulation of payments by DDC employees and whether private buyers properly paid for DDC products, may be linked but are separate questions.
Shrestha is also an executive director of the Laxmi Group, which describes Sujal as its subsidiary. More than 400 employees are employed in the company, about 65,000 litres of daily milk collection, more than 100 collection centres, about 1,200 retail outlets and sales of Rs 2.33 billion in 2024 and Rs 2.88 billion in 2025.
The Pokhara privatisation
The case has revived questions about the Pokhara Milk Supply Scheme. DDC set it up in 1977, and its plant began operating in 1980, with Danish support. The government later moved to privatise it.
Sujal says it was chosen after a bidding process among three bidders and acquired the business in January 2005. The project was privatised on December 16, 2004, and that Laxmi Group bought land and assets, including a chilling centre, a valuation having been carried out by Green T Consultant.
Privatisation of the Pokhara scheme had been discussed for years. A December 2004 Asian Development Bank evaluation noted that earlier attempts to privatise it were unfinished by March 2004, and that DDC then held an estimated 50 percent of the milk-processing market.
Farmers and milk quality
DDC has had trouble paying farmers.
In February, it reported that about Rs 320 million remained payable, after delays of up to nine months. In August, Agriculture Minister Geeta Chaudhary told Parliament the delay had been cut from eight months to three, with a target of 25 days. By early September, arrears were reported at about Rs 20 crore.
Separately, the National Dairy Development Board tested 784 packets of 500 ml milk from the Kathmandu Valley market between July 17, 2025 and January 26, 2026. It reported that 419 packets missed the fat standard, 588 failed the SNF standard and 278 contained less than 500 ml. Sujal Milk and DDC milk were among those named as failing. This is a regulatory matter.
