Medical Syndicate: Suspected Billion-Rupee Overcharging, Evidence Missing
News Analysis
Medical examinations for Nepali workers seeking foreign employment are a mandatory process directly linked to their health, safety and lives. However, a major government investigation report examining allegations that this process had been turned into a financial network involving a limited number of medical institutions, recruitment agencies, a domestic technology service provider and a foreign system operator has disappeared from the Ministry of Labour.
The case involves serious allegations, including issuing reports without conducting medical examinations, forcing the same worker to undergo repeated tests, collecting fees above the approved rate, underreporting actual transactions to evade taxes, using a private company’s invoices to collect money and transferring funds from Nepal to Malaysia. However, the original report, documents seized during the raids and the separate case files prepared on 36 institutions have not been found at the ministry, making it difficult to verify or refute these allegations.
Former Additional Inspector General of Nepal Police Rajendra Singh Bhandari was appointed Minister for Labour, Employment and Social Security in the interim government led by Sushila Karki on Mangsir 26, 2082 BS. Upon assuming office, he pledged to dismantle organised networks operating within the labour sector and intervene against irregular structures in foreign employment.
After taking charge of the ministry, Bhandari formed a 16-member special task force to identify possible organised fraud, syndicates and financial irregularities in the foreign employment sector. According to available information, the task force included ministry officials such as Upendra Poudel and Lavaraj Joshi, two deputy superintendents of Nepal Police, police inspectors and representatives of other relevant agencies.
The initial plan was to base the task force, led by Poudel, at the Department of Foreign Employment. However, Bhandari has publicly stated that the team was instead deployed for direct monitoring and raids because the department did not provide an adequate working environment.
During nearly three months of monitoring, the task force examined the activities of medical institutions, recruitment agencies and other service providers connected with foreign employment. It reportedly raided 36 medical institutions involved in conducting biomedical examinations for workers travelling to Malaysia and seized invoices, banking records, medical examination files, workers’ details, tax documents and other evidence.
Separate case files were reportedly prepared for each institution, along with a consolidated report containing the task force’s overall findings.
Although more than 200 institutions are officially listed to conduct medical examinations for Nepali workers travelling abroad, biomedical testing for workers bound for Malaysia was restricted to 36 designated institutions. The task force regarded this limited arrangement as the possible centre of a syndicate.
The Malaysian side, however, has maintained that the 36 institutions were officially accredited under the biomedical system in accordance with the bilateral labour agreement.
The existence of a restricted list of 36 institutions cannot, by itself, be considered illegal. The central questions are how those institutions were selected, whether the selection process ensured equal competition and transparency, whether they collected fees above the approved rate, what legal basis existed for any additional charges and who ultimately benefited from the money collected from workers.
The controversy began after the ministry expanded the scope of medical testing and set the fee at Rs 9,500. After becoming minister, Bhandari decided on Poush 4, 2082 BS to reduce the fee to Rs 6,500.
However, details made public from the task force’s preliminary monitoring indicated that some institutions continued to collect Rs 9,500 even after the fee reduction.
According to the task force’s draft findings, some recruitment agencies sent workers to particular medical centres even before their employment, visa and labour approval status had been clarified. The report alleged that previously completed tests were rejected, workers were required to undergo examinations again at other institutions, money was collected repeatedly while only one receipt was issued and additional financial burdens were imposed through possible collusion between recruitment agencies and medical institutions.
The task force also alleged that some institutions issued medical reports without conducting all the required tests, lacked adequate equipment and personnel, prepared reports even when workers had not physically visited the medical centre and declared workers fit or unfit despite actual test results indicating otherwise.
The report further raised suspicions that the number of medical examinations performed was different from the number reported in audited accounts, potentially resulting in revenue evasion.
These allegations are not new. Another monitoring operation conducted by the Labour Ministry in 2080 BS also found reports being prepared without examinations, laboratories failing to meet required standards, insufficient staffing, non-operational equipment and serious negligence in the testing process.
This suggests that the problem did not begin during the tenure of a single minister or task force but reflects a structural weakness that has persisted for years.
The task force reportedly included individual complaints and video statements from workers as evidence. Twenty-two-year-old Sachin Chaudhary of Shivraj Municipality–10 in Kapilvastu filed a complaint alleging that New SOS HR Pvt. Ltd. and Amitabha Buddha Medical Centre had collected more than the approved amount.
Publicly available details indicate that the task force also recorded his video statement. However, no wrongdoing by these institutions or individuals has been conclusively established. The complaint and the task force’s recommendations merely provide a basis for further criminal and financial investigation.
The task force also received a complaint concerning Aniruddha Prasad Barai, who underwent a medical examination at South Asian Medical Centre in Nepal but was declared unfit during another examination after reaching Malaysia and was sent back.
If confirmed, such a case would require a separate investigation into the quality of the medical examination conducted in Nepal, the reliability of the report and the financial and psychological harm suffered by the worker.
The most serious financial issue identified in the report concerns additional charges associated with Malaysia’s biomedical system.
According to portions of the report that have entered the public domain, the 36 institutions collected additional money from each worker, beyond the government-approved medical examination fee, using invoices issued by the private technology service provider Macro Tech Pvt. Ltd.
Some records mention an additional charge of Rs 3,000, while others refer to Rs 3,164. The company’s name has also been recorded as “Macro Tech” in some public accounts and “Micro Tech” in others. Its correct legal identity must therefore be established through company registration documents, tax records and contractual agreements.
According to the task force’s account, the additional money was deposited into Macro Tech’s bank accounts and was suspected of being transferred abroad as a system fee connected with Malaysia-based Bestinet Sdn Bhd.
The task force also recommended examining whether money was collected using a private company’s value-added tax invoices despite health services being exempt from VAT.
It was further alleged that the Malaysian Embassy wrote to Nepal Rastra Bank on June 16, 2020, seeking permission to remit fees connected with 11,828 Nepali workers who had undergone medical examinations between February 13 and 29, 2020.
Publicly available information indicates that the task force questioned the authenticity of the letter and recommended that it be verified through the embassy, Nepal Rastra Bank, the concerned bank and the Ministry of Foreign Affairs.
However, no competent investigative authority has publicly concluded that the letter was forged.
The estimated collection of approximately Rs 4.5 billion mentioned in the report is also not a figure established through a final audit.
Available details indicate that the estimate was calculated on the assumption that an average additional charge of Rs 3,000 had been collected from approximately 1.5 million workers over an extended period. Multiplying 1.5 million by Rs 3,000 produces a total of Rs 4.5 billion.
Confirming that figure would require reconciling the annual number of workers travelling to Malaysia, medical examination records, cancelled or repeated tests, institutional invoices, bank deposits, tax declarations and funds transferred abroad.
It would therefore be factually inappropriate to state that “fraud worth Rs 4.5 billion has been proven.”
The accurate formulation is that the task force made a preliminary estimate that additional collections of up to approximately Rs 4.5 billion may have taken place. A full investigation could determine that the actual amount was lower, higher or collected as a legally authorised service fee.
The memorandum of understanding on the recruitment, employment and repatriation of workers signed between Nepal and Malaysia on October 29, 2018, provides that the cost of security screening and medical examinations conducted in Nepal must ultimately be borne by the employer.
The Malaysian Embassy has also stated that when a worker pays the amount in advance in Nepal, the Malaysian employer must reimburse it together with the worker’s first month’s salary.
This creates another important area for investigation.
There appears to be no evidence demonstrating whether Nepali workers who paid for medical examinations and biomedical services were actually reimbursed with their first month’s salary in Malaysia.
The claim that this provision of the agreement was implemented cannot be verified without comparing workers’ bank accounts, salary records, employment contracts and payment records maintained by Malaysian companies.
According to a position made public by the Malaysian Embassy in Jestha 2083 BS, the 36 medical institutions were officially authorised under the biomedical system.
The embassy stated that, in addition to the Rs 6,500 fee set by the Government of Nepal, a service fee of Rs 3,000 applied to the Malaysian system and that Macro Tech and Bestinet had been authorised to operate the system, collect fees and transfer the funds.
This position directly challenges the task force’s suspicions of a syndicate and unauthorised collections.
However, the embassy’s clarification does not answer every question.
It remains unclear when and through which decision the Government of Nepal accepted the Rs 3,000 service fee, who was legally authorised to issue invoices for it in Nepal, which approval from Nepal Rastra Bank was used to remit the money abroad, how the tax liability was determined and whether workers were ultimately reimbursed by their employers.
Nepal’s Foreign Employment Regulations provide for monitoring the work of listed medical institutions, recommending their removal from the list when deficiencies are found and requiring regular reports on their activities to be submitted to the ministry.
The ministry has also introduced a separate procedure governing the listing, renewal and monitoring of medical institutions.
Monitoring and enforcement are therefore not merely discretionary initiatives of the ministry but part of its legal responsibility.
Based on the available evidence, the task force recommended further investigation into possible fraud, organised crime, tax and revenue evasion, foreign-exchange violations and money laundering involving some institutions.
Such a recommendation does not automatically establish the guilt of any institution or individual.
A money-laundering offence can be established only if investigators identify bank transactions, beneficiaries, the source and destination of funds and evidence that assets generated through a predicate offence were concealed, converted or otherwise disguised.
Nepal has a separate law governing the prevention of money laundering.
After completing its investigation and preparing separate files on each institution, along with the seized evidence and a consolidated report, the process appears to have stopped unexpectedly.
According to Rajendra Singh Bhandari, a copy of the report was placed in his office at the ministry on Chaitra 8, 2082 BS, after the elections had concluded. He has said that the government changed before he could study or implement the report.
The ministry’s spokesperson, however, has said there is no record showing that the report was formally registered and that the file cannot be found at the ministry.
This raises serious administrative questions.
Why was a report resulting from a three-month government investigation involving police officers, raids on 36 institutions and the seizure of evidence not formally dispatched and registered?
Who was responsible for safeguarding the seized documents?
Was an official handover receipt prepared?
Were the secretary, administrative division or records section informed when the report was placed in the minister’s office?
In a government investigation, the chain of custody recording who seized documents, when and where they were collected, where they were stored and to whom they were transferred is critically important.
Without such a chain, evidence may not only disappear, but its integrity and admissibility in court may also be questioned even if it is later recovered.
The Office of the Prime Minister and Council of Ministers reportedly directed the Central Investigation Bureau of Nepal Police on Baisakh 2, 2083 BS to investigate the medical examination system.
The CIB repeatedly wrote to the Labour Ministry requesting the original report, the 36 separate case files and the seized documents.
Publicly available information indicates that instead of receiving all the original evidence required for the investigation, the CIB was sent only a 13-page photocopy. The original files had still not been provided even after a third round of correspondence.
After the report could not be found, former minister Bhandari supplied the ministry with a digital copy in his possession.
This prevented the text of the report from being completely lost.
However, a digital copy cannot replace the original invoices, bank vouchers, tax documents, contracts, signatures, original complaints and other physical evidence seized during the raids.
On Asar 5, 2083 BS, the Commission for the Investigation of Abuse of Authority sent letter number 58312 to the ministry, directing it to provide all documents and case files prepared by the task force within seven days.
The CIAA expressed concern that the disappearance of government files held under the ministry’s responsibility could constitute an abuse of authority.
As of July 16, 2026, no official conclusion had been made public regarding which documents the ministry provided to the CIAA following the Asar 5 letter, whether the original case files were found, whether statements were taken from anyone or whether responsibility was determined.
The CIB also does not appear to have published a final investigation report on the suspected fraud or the transfer of money abroad.
To establish the truth, the first phase of the investigation should reconcile the number of workers recorded in the biomedical systems of the 36 medical institutions with labour approval records from the Department of Foreign Employment, invoices issued by Macro Tech, deposits made into the relevant bank accounts, foreign currency transferred to Bestinet, transactions declared to the Inland Revenue Department and reimbursements received by workers from Malaysian employers.
The second phase should authenticate the original copy of the Malaysian Embassy letter allegedly dated June 16, 2020, through the embassy, the Ministry of Foreign Affairs and Nepal Rastra Bank.
Investigators should determine whether the details of the 11,828 workers mentioned in the letter correspond with records in the biomedical system and associated banking transactions.
The third phase should examine the basis on which the 36 institutions were selected, their ownership structures, commercial relationships among their operators, links with recruitment agencies and patterns through which workers were referred to specific medical centres.
Evidence that workers were denied freedom of choice and directed to designated institutions could strengthen suspicions of a syndicate.
The fourth phase should investigate the administrative chain through which the ministry’s report and case files disappeared.
Investigators should determine to whom the task force members handed over the materials, who had access to the minister’s office, how the office was transferred following the change of government, who handled the ministerial secretariat’s documents and what was handed over to the new minister or secretary.
The answers should be sought through official records and CCTV footage.
The principal victims of this case are workers seeking foreign employment.
Many prepare to travel abroad by taking loans, mortgaging land or spending their families’ savings.
An additional charge of a few thousand rupees may appear small when imposed on a single worker, but when repeated across hundreds of thousands of workers, it becomes a structured transaction worth billions of rupees.
The evidence available so far provides grounds to suspect serious irregularities in the medical examination sector, but it has not conclusively established the criminal liability of any medical institution, recruitment agency, Macro Tech, Bestinet or government official.
The Malaysian side maintains that the system and the Rs 3,000 service fee were lawful, while the task force suspected fraud, tax evasion and irregular foreign transfers within the same arrangement.
These conflicting claims can ultimately be tested only through banking, taxation, foreign-exchange and employment-contract records, as well as individual payment details from workers.
One fact, however, remains indisputably serious.
A 16-member task force formed by the government, supported by police officers, raided 36 institutions and prepared a report and original case files, yet the ministry failed to safeguard them.
This is not merely routine administrative negligence.
It has obstructed an investigation into the possible exploitation of workers involving billions of rupees, exposed weaknesses in the government’s management of evidence and raised questions over whether influential financial groups had access within the ministry.
The government’s responsibility cannot now be limited to printing the digital copy of the missing report and formally registering it.
It must locate the original seized evidence, secure digital and banking records, examine the handover process involving responsible employees and officials, allow the accused institutions and companies to present their positions and publish the findings of a complete investigation.
Whether the Rs 4.5 billion estimate is accurate will be determined by the investigation.
However, ignoring the disappearance of the report would send the message that the state is incapable of taking effective action against syndicates operating under the cover of foreign employment.
The question of whether workers’ medical examinations were transformed from a safety procedure into a closed system of profit must now be answered not from the drawers of the ministry, but through a transparent criminal, financial and administrative investigation.
