Nepal Home Minister Sudan Gurung quits as money laundering link scrutiny intensifies

Nepal’s Home Minister Sudan Gurung resigned recently, stepping down amid intensifying scrutiny over his alleged financial links to a businessman under investigation for money laundering. Announcing his decision, Gurung said “ethics is greater than position” and stressed that public trust must take precedence over holding office.

In a Facebook post, Gurung said he was resigning to ensure an impartial probe into allegations surrounding his investments and to eliminate any conflict of interest while serving in government. “For me, ethics is greater than position, and there is no greater force than public trust,” he wrote, adding that the rising demand for transparency—driven in part by Nepal’s Gen Z-led civic movement—had reinforced the need for accountable leadership.

He said his exit would allow investigations linked to him to proceed without influence or interference.

Why did sudan gurung resign?

The controversy erupted after reports highlighted Gurung’s shareholdings in companies linked to businessman Deepak Bhatta, who is currently under investigation in a money laundering case. Documents made public in recent days showed that Gurung held stakes in Star Micro Insurance and Liberty Micro Insurance—firms allegedly associated with Bhatta.

Responding to the allegations, Gurung said he had taken the public debate over his financial disclosures seriously. He maintained that his investments were declared assets acquired before he assumed office and argued that holding shares in a company did not imply involvement with all individuals connected to it.

He also clarified that the probe into Bhatta was being handled by Nepal’s Department of Money Laundering Investigation under the Finance Ministry—not the Home Ministry—rejecting suggestions of any institutional conflict.

However, questions intensified after reports suggested that investments of around NPR 2.5 million each in the two insurance firms were not separately disclosed. Gurung countered that these holdings were part of a broader declaration of over NPR 27 million in securities investments. Critics remained unconvinced, pointing out that the firms were not publicly traded, raising concerns over how such shares were categorized.

Political timing and wider impact

Gurung’s resignation comes at a politically sensitive moment for Nepal, with the government led by Prime Minister Balendra Shah—popularly known as Balen Shah—facing protests over customs enforcement at the India-Nepal border and a reported move to delink student unions from political parties.

At just 38, Gurung had emerged as a prominent face of Nepal’s new political wave, rising to national prominence after last September’s Gen Z protests. He later won the Gorkha-1 seat in the March 5 general elections and was appointed Home Minister when Shah formed his Cabinet.

His resignation marks the second ministerial exit from the Shah government this month. Earlier, former Labour Minister Deepak Kumar Sah was removed following allegations that he misused his office to retain his wife on the Health Insurance Board.

While Gurung had earlier dismissed the allegations as rumors and urged a distinction between claims and verified facts, his decision to step down underscores the mounting pressure on public officials in Nepal to uphold transparency—and the growing cost of perceived ethical lapses in public life.