Private Sector Resists as Government Moves to Criminalise Corporate Bribery

Despite long-standing resistance from the private sector, the government has moved ahead with a plan to introduce legal provisions aimed at curbing corruption within private businesses.

Industry bodies, including the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), the Confederation of Nepalese Industries (CNI), and the Nepal Chamber of Commerce (NCC), have consistently opposed the move. They argue that allowing an authority such as the Commission for the Investigation of Abuse of Authority to probe private sector activities could weaken business decision-making and hurt the investment climate.

The Commission, however, maintains that Nepal’s commitments under international anti-corruption conventions require the country to criminalise corruption in the private sector as well.

On Tuesday, the government released the draft of the Second Strategic Plan Against Corruption (2025/26 to 2029/30), outlining a framework to criminalise corruption-related activities across all sectors.

Read: Government Pushes for Greater Oversight in Private Sector

The draft proposes measures to address corruption in cooperatives, as well as in public and private companies and other organisations. It also calls for policy and legal reforms that allow corrective action in cases of misconduct, except where there is a direct loss to the state or clear evidence of undue benefit.

A key proposal is the drafting of a new Anti-Corruption Act. The law would define corruption in both public and private spheres, set out offences and penalties, enable recovery of misused assets, and establish the roles of investigative, prosecutorial, and adjudicating bodies.

The plan sets a two-year timeline for these reforms. It also flags potential risks, including resistance from the private sector, constitutional questions over jurisdiction, and limited implementation capacity.

The draft further proposes to make activities that distort or manipulate business competition punishable under anti-corruption laws.

The government plans to amend existing laws governing private sector activity, including provisions under the Corruption Control Procedures Code, 2017, particularly those related to property transactions, along with other relevant regulations.

Under the proposed framework, bribery in financial, commercial, and business dealings within the private sector will be explicitly criminalised. Existing laws will be revised to align with this approach.

The draft also introduces provisions to address corruption by private entities that results in the misuse of public assets or causes damage to public property. Acts such as falsifying financial records, concealing income and expenditure, inflating costs, using forged documents, or deliberately destroying records will be treated as criminal offences.

To improve transparency in share transactions, the government has proposed amendments to the Company Directive, 2015. For transactions exceeding Rs 1 million, buyers would need to provide original bank statements showing payment deposited into the seller’s account, along with supporting vouchers or account payee cheques, for official verification.

In line with the Companies Act, shareholders and employees who certify share transactions without valid proof of payment would face investigation and legal action on corruption charges. Such transactions could also be invalidated under the proposed framework.

Key Pointers:

• Private sector corruption to be criminalised under new legal framework

• New Anti-Corruption Act proposed, covering both public and private sectors

• Two-year timeline set for legal and institutional reforms

• Business groups warn of risks to investment climate and decision-making

• Competition manipulation to be treated as a punishable offence

• Bribery in private financial and commercial dealings to be criminalized

• Laws related to property transactions and private sector governance to be revised

• Financial misreporting, forged documents, and record destruction to be criminal offences

• Share transactions above Rs 1 million to require verified banking proof

• Non-compliant share records may be annulled, with legal action against those involved