Nepal’s Home Minister Sudan Gurung, a handpicked aide to Prime Minister Balendra Shah, resigned on Wednesday amid revelations about his wealth, investments and alleged business ties with businessman and power broker Deepak Bhatta, who is being investigated in a money laundering case. In a day of dramatic developments, Shah took over the home ministry after Gurung’s ouster, just 26 days after taking office in his anti-corruption government.Gurung’s resignation is Shah’s second ministerial setback in as many weeks. On April 9, Shah fired Labor, Employment and Social Security Minister Deepak Kumar Sah after a disciplinary panel found that Shah abused his power by keeping his wife, Junu Shrestha, on the Health Insurance Board, a move the party said violated its code of conduct and discipline.Gurung, a former events manager and nightclub DJ, founded NGO Hami Nepal after helping with relief efforts during the 2015 earthquake. He has emerged as one of the leaders of last year’s deadly Gen Z protests, which forced former Prime Minister KP Sharma Oli to resign and ultimately propelled Shah to the premiership. Notably, Shah and Gurung officially joined the ruling Rashtriya Swayamsevak Sangh (RSP) together on January 18, with Gurung announcing on social media that they would enter the party office together.Announcing his resignation, Gurung said he was resigning to conduct an impartial investigation and avoid any conflict of interest. “To me, ethics are more important than office, and no power is more important than public trust,” he said, adding that questions raised by citizens must be answered with “moral integrity.” Shah had sought written clarification from him before resigning.Protests by Gen Z activists, who have also called for his sacking and arrest after questions emerged about his assets and alleged links to Bata, helped Gurung move from civil society into Nepal’s political corridors. Gen Z Movement Nepal said in a statement that allowing him to remain in office “could affect the investigation process and represent a clear conflict of interest”, adding that a minister facing an investigation cannot proceed without violating “fundamental ethical and legal principles”. The controversy began after the ministers’ asset declarations were made public on April 12. Gurung declared stocks and securities, 89 tolas (1.04 kg) of gold, 6 kg of silver, over Rs 6.1 million (Rs 3.8 million) in cash, a vehicle and land in Dhankuta, as well as properties registered in the name of his father and grandfather in Chitwan and Gorkha. The revelations raise questions about the wealth of a politician who has made his public profile known for his activism, disaster relief and clean governance.The problem was further exacerbated by reports that Gurung held founder-level shares in two micro-insurance companies, Star Micro Insurance and Liberty Micro Life Insurance, and his name cropped up next to figures associated with Bhatta and Shanker Group vice-chairman Sulav Agrawal. Gurung invested Rs 2.5 million (approximately Rs. 1.56 million) each in the two companies, which are yet to launch their IPOs. Agrawal was also arrested earlier this month as part of a wider money laundering probe into transactions worth 3.7 billion rupees (2.31 billion rupees).Gurung denied hiding the investments, saying they were part of his public stock market portfolio. “People who intend to hide their assets will not publicly declare investments above Rs 2 crore,” he had earlier said. He also said the purchase of shares did not constitute a business partnership.Critics, however, say unlisted founder stock should be listed separately rather than lumped into general security holdings. They also questioned the source of the funds as records showed that Chang Agarwal deposited Nepalese rupees 2.25 million (approximately 1.4 million rupees) and Nepalese rupees 3.75 million (approximately 2.34 million rupees) into Gurung’s personal account on May 9, 2023. The next day, Nepalese rupees of Rs 2.5 million each (Rs 1.56 million) were transferred from the account to Liberty Micro Life Insurance and Star Micro Insurance.Financial records also raise questions about donations. From May to June 2021, Gurung’s personal account received about 6 million rupees (approximately 3.75 million rupees) in Nepal’s Covid-19 relief donations, of which 2.59 million rupees (approximately 1.62 million rupees) were later transferred to Nepal Hami. Between July 2021 and August 2025, Hami Nepal received Rs 2.28 million (Rs 1.42 million) in funds from Nepal into its bank account, with Shanker Group considered one of its largest corporate donors.Barta is chairman of Infinity Holdings, which has interests in energy, real estate, travel, consumer products, government contracts, insurance and stock markets. Investigators have been looking into alleged suspicious transactions involving Bhatta, Agrawal, Shanker Group and Himalayan Reinsurance. Shah’s government has also faced protests and rows along the India-Nepal border over tougher tariffs on goods imported from India worth more than 100 rupees (about 63 rupees), while large demonstrations broke out in Kathmandu after the government banned party-affiliated student politics at universities and replaced student unions with student unions.
