by MB Subba

THIMPHU (Kuensel/ANN) - Bhutan's opposition party will hold Prime Minister Tshering Tobgay accountable for character assassination of a senior member of the party, if the government is bent on taking advantage of the sincerity and restraint the opposition exercises.

At a press conference yesterday in Thimphu, members from the opposition said that the government’s allegation of conflict of interest against former minister Yeshey Zimba in chairing the 156th Cabinet session that provided Fiscal Incentives to tourist standard hotels in 2013 are baseless and politically motivated. MP Yeshey Zimba was not present at the press conference.

Opposition leader Pema Gyamtsho (PhD) said it was in fact the government that has indulged in conflict of interest by bringing up the issue at the fag end of its term to gain political mileage. “There are no two ways about it. This is politically motivated,” he said.

Last month, the government issued a press release alleging that Hotel Le Meridien, which belongs to the daughter of Yeshi Zimba, benefited Nu 76.88 million (US$ 1.182M) in fiscal incentives.

The government also alleged that the former minister was alleged to have committed policy corruption, engaged in conflict of interest and official misconduct and asked the Anti-Corruption Commission (ACC) to investigate.

The opposition leader said that it is utterly shocking that the government could make such wild allegations against a senior and respected member of the former government and who is on the verge of retirement.

According to him, the fiscal incentive was granted to 92 tourist standard hotels, one of which was Hotel Riverside that belongs to the brother of the current finance minister Namgay Dorji.

The exemption amount availed by Le Meridien was the highest simply on account of the very high cost of its investment as a five-star hotel and not based on any other consideration, the press release stated from the opposition stated.

“The government has tried to dramatise and sensationalise the situation by mentioning a high figure of Nu 76.88m as additional benefits to Le Meridien,” Pema Gyamtsho said. The incentives, he said, did not come by way of cash grants from the government and are just notional revenue forgone to promote tourism.

“The investment would not be there if customs duty and sales tax on essential imports are not exempted. In turn, the revenue that has been generated through the hotel and tourism industry would not be there had there been no investment,” he said.

The fiscal incentive was provided for all industries and not just for hotels. “Had the Cabinet granted the incentive only to Le Meridien, then it would be a case of conflict of interest,” he said.

Former finance minister and MP Wangdi Norbu said that while implementing the Fiscal Incentives 2010, anomalies were observed, which made the ground implementation difficult. He said while integral parts of components or categories of items were treated differently for taxation purposes, hotels built earlier like Taj Tashi received full benefits in keeping with the government’s policy and did not face similar problems.

Wangdi Norbu said that to clarify these anomalies, the concerned agencies undertook extensive discussions and consultations following which a multi-sectoral committee consisting of members from the Ministry of Finance, Ministry of Economic Affairs, Tourism Council of Bhutan and the Hotels Association of Bhutan, was formed to review and submit a specific list of items that fall under a particular category of exemption with respect to the hotel industry.

Denies conflict of interest

According to the Opposition, Yeshey Zimba as the senior-most minister officiated and chaired the cabinet session in the absence of the Prime Minister in keeping with the procedures and standing practice.

Former economic affairs minister and MP Khandu Wangchuk said the former minister would have needed to declare conflict of interest if the incentive was for hotel Le Meridien only. “However, this incentive was meant to benefit all tourist standard hotels.”

Khandu Wangchuk said that going by the same logic, members of the Cabinet, the Speaker, the Chairperson of the National Council, the opposition leader, and equivalent cabinet posts holders did not recuse themselves during the deliberation of their pay revision. “Since they were to benefit enormously, they could have recused themselves and left the decision for the rest of the members,” he said.

The question of policy corruption arising out of conflict of interest, the party members said, also does not arise at all as the Cabinet approved the recommendation of the inter ministerial committee and not the request from Yeshey Zimba’s daughter for specific benefits of the Le Meridien hotel.

Rejects official misconduct charge

The Opposition cites Section 294 of the Penal Code of Bhutan, which states that “A defendant shall be guilty of the offence of official misconduct, if the defendant knowingly commits an act relating to the office constituting an unauthorised exercise of the official functions or unauthorised divulging of restricted official information or secrecy.”

According to the section, an official would be guilty of misconduct if he or she refrains from performing a duty, which is imposed upon the defendant by law.

According to the Opposition, Yeshey Zimba acted upon duly authorised authority and performed his duty as imposed upon him by the law. “Therefore, there is no act of official misconduct committed by him. Rather we feel that this is a case of a desperate government trying to legitimise their ill-intended attempt to discredit and defame the former minister,” Khandu Wangchuk said.

Possible implications

The Opposition stated that if ACC accepts the PM’s request to investigate this as a ‘conflict of interest’ case, it would have a far-reaching consequence in democracy and society.

The opposition leader questioned the need for the government to wait for four and a half years before deciding to take it up with ACC.

“Does it mean it has its own interest in waiting for so long to allow its supporters to avail the benefits of the exemption? Is there not a clear case of conflict of interest with the timing to gain political mileage for the government? Would this not merit the investigation of all the other 91 beneficiaries?” he asked.

He said conflict of interest by nature is a subjective matter. This issue, he said, has opened a pandora’s box of allegations and counter allegations.

The Opposition says that such a deliberately timed allegation would have impact on the economy. It said it would damage the reputation as a destination for investment and further shatter investor confidence.

“On the one hand, the government is struggling to attract FDI, and on the other hand, it is dampening whatever little investment interest we have as a country. Investors, both domestic and foreign, need security and returns on investment and this requires political stability and consistency in government policies,” the press release stated.

The Opposition also cautioned about the impact of the issue on social harmony. “As a leader, the PM should think of uniting people, not dividing them based on narrow political agenda.”