GOVERNMENT OFFERED TOO-GOOD-TO-BE-TRUE LOAN

C O N F I D E N T I A L KATHMANDU 000637 SIPDIS SIPDIS DEPT FOR SCA/INS, SCA/RA, S/CT, EB/ESC/TFS E.O. 12958: DECL: 03/07/2016 TAGS: PTER KCRM EFIN UK NP SUBJECT: GOVERNMENT OFFERED TOO-GOOD-TO-BE-TRUE LOAN Classified By: Ambassador James F. Moriarty. Reasons 1.4 (b/d). ¶1. (U) This is an action request. See paragraph 4. USD 250 Million Loan at 5 percent -------------- ¶2. (C) In a March 7 meeting, Minister of State for Finance Roop Jyoti sought the advice of the Ambassador regarding a proposed foreign loan to His Majesty's Government of Nepal (HMGN). Jyoti stated that Tryed Finance Limited, based in London, had offered HMGN a USD 250 million loan at five percent per year payable by HMGN, for twenty years, with five percent to Tryed up front (i.e. USD 12.5 million). Jyoti acknowledged that it sounded "too good to be true," but explained that HMGN did not have the capability to ascertain if the loan was from a legitimate source. He asked for U.S. assistance to determine whether any criminal or terrorist sources were associated with Tryed, as he stressed that HMGN did not want to be involved in money laundering or other action that would lead to sanctions against HMGN, or give HMGN a bad reputation. (Jyoti at one point suggested that HMGN could accept the loan to bait a trap for the wrongdoers if the money was found to be illicit.) However, he noted that HMGN needed the money, and was interested in pursuing the loan if the money was found to be clean. (Note: IMF Resident Advisor Sukhwinder Singh, had alerted the Ambassador that Jyoti planned to approach the USG about this loan. Singh commented that Jyoti had told him that he had received instructions from the King "to make it happen, but make sure it is not illegal." End note.) Information on Loan Provider -------------- ¶3. (C) Jyoti provided the Ambassador with the following information about the company offering the loan: Tryed Finance Limited, Subsidiary of Multinational Industries Limited. Registered in England, Number 4753994. Address: 83 Caledonian Road, London N1 9BT. Tel/Fax: 020 7713 8080. E-mail: tryedfinancelimited1@activemail.co.uk Website: multinational-endevco.co P.L. Majumdar, as Director, signed a letter to Jyoti regarding Tryed's proposal. Action Request -------------- ¶4. (C) Post requests the Department to assist in determining if Tryed is known to be associated with any illegal, criminal, or terrorist source, or has any other questionable ties. Post further requests guidance on what advice to pass to HMGN on accepting a loan from Tryed. Post also requests guidance on USG and/or international sanctions that HMGN might face if, against U.S. advice, it accepted a loan that was illicit in any way. Comment -------------- ¶5. (C) HMGN appears to be taking all proper steps to try to ascertain the true nature of this loan proposal, including consulting with the IMF. IMF Representative Singh noted that the U.K. could not release the information about a British company to the IMF without going through Interpol, and thus suggested that HMGN contact the U.S. for assistance, which HMGN did. According to the IMF, the loan company, while based in the U.K., is financially backed by non-resident Indians. (Note: The Nepali rupee is pegged to, and fully convertible with, the Indian rupee, which could benefit a money laundering operation. End note.) The IMF had heard rumors that this company had also approached Burma and North Korea. MORIARTY