The BRICS TimesNepal’s Home Minister Sudan Gurung has resigned following a growing controversy over his financial holdings in insurance companies linked to a businessman arrested for money laundering, putting PM Balen Shah’s young government under intense pressure.
A minister under fire from day one
Nepal’s Home Minister Sudan Gurung has resigned from his post. This came after a storm of allegations surrounding his shareholdings in companies tied to controversial businessman Deepak Bhatta. Bhatta is currently in police custody. He was arrested on April 1 and is under investigation by Nepal’s Department of Money Laundering Investigation.
The controversy broke when documents surfaced publicly. They revealed Gurung held shares in Star Micro Insurance and Liberty Micro Life Insurance. Both companies are linked to Bhatta and are currently under scrutiny. Gurung’s name appears as the 49th founding shareholder of Star Micro Insurance. His investment in that company stands at around Rs 2.5 million.
Shareholding controversy rocked the government
The documents showed Gurung held shares worth a staggering Rs 431.56 million in total. This included investments in non-listed companies. The two insurance firms Star Micro Insurance and Liberty Micro Life Insurance have not yet issued an IPO. They are not listed on NEPSE, Nepal’s stock exchange.
Gurung initially defended himself strongly. He posted a lengthy explanation on social media. He insisted he had disclosed all his holdings. “I have clearly mentioned an investment of over 20 million in shares traded in the securities market in my asset declaration, which anyone can view on the Cabinet’s website,” he said. He also argued that “buying shares is not a crime, and buying shares does not make one a partner.”
He further clarified that he financed these purchases through loans. He added that all transactions went through proper banking channels. However, critics pointed out that his explanation did not account for the full Rs 431.56 million portfolio. Questions around the source of funds remained unanswered.
Opposition parties and Gen Z demand accountability
The resignation pressure came from multiple directions. Nepal’s main opposition party, Nepali Congress (NC), demanded an independent probe. NC Spokesperson Devaraj Chalise issued a press statement. “Transparency and accountability are fundamental pillars of democracy. Therefore, a reliable, impartial and fact-based investigation into such matters is indispensable,” the statement read.
CPN-UML also joined the chorus calling for Gurung’s exit. The party said the controversy “raised suspicions” and hinted that more past irregularities could come to light.
Even the Gen Z Movement in Nepal the very movement that helped bring the ruling Rastriya Swatantra Party (RSP) to power that demanded Gurung’s dismissal and arrest. Movement spokesperson Bijay Shah said keeping Gurung in office while investigations were ongoing represented “a clear conflict of interest.” The statement added that holding a ministerial post while under investigation “goes against basic ethical and legal principles.”
Gen Z Red Force Nepal also called for his resignation on moral grounds. They argued his continued presence could damage public trust.
PM Balen Shah’s government faces heat
Prime Minister Balendra Shah sought a written explanation from Gurung over the discrepancies. Gurung’s office confirmed that a written clarification was submitted on Monday evening. Despite this, political analysts said the clarification was “selective” and did not address the core questions around his business ties with Bhatta.
Inside RSP, the mood was tense. Party insiders noted that the central committee meeting on Monday did not formally discuss the matter. However, individual lawmakers were vocal. “Sah was sacked without allowing him to clarify. Allegations against the home minister are more serious,” said one RSP lawmaker, also a party office-bearer.
Former Transparency International Nepal chairperson Khemraj Regmi weighed in. He said the government must satisfy the public when questions arise. “Whether the option is resignation or something else, both the party and government must speak,” he said. He added that since the current government came to power on promises of good governance, Gurung stepping aside voluntarily would be appropriate.
A young politician’s turbulent rise and fall
Sudan Gurung, born on July 18, 1987, emerged as one of the most recognizable faces of Nepal’s 2025 Gen Z protests. He played a key role in negotiations that led to former Chief Justice Sushila Karki becoming interim prime minister. The Gen Z wave eventually swept the RSP into power with nearly a two-thirds majority in the February 2026 election.
Many were surprised when Gurung received the Home Affairs portfolio in PM Balen Shah’s cabinet. In his short tenure, he made bold moves. On his first evening in office, he ordered the arrest of former Prime Minister KP Sharma Oli and former Home Minister Ramesh Lekhak. His social media-driven governance style drew both praise and concern. “Investigation files that were stalled during the previous governments are being rapidly reopened, which is positive,” said Hemanta Malla Thakuri, former Deputy Inspector General of Nepal Police. However, Thakuri also noted that a minister releasing arrest warrants on social media “could cast doubt on the impartiality of investigations.”
This controversy is not the first one involving Gurung. He had earlier been drawn into a land dispute involving Fewa Lake. That matter was resolved quickly. This time, however, the political and public pressure proved too great to withstand.
Gurung’s resignation marks another turbulent chapter for PM Balen Shah’s government. It is barely weeks old and has already seen one minister fired and another warned. The RSP, which rose to power on promises of clean politics and systemic change, now faces serious questions about whether it can truly deliver the transformation Nepal’s Gen Z generation demanded.
Akshay Didwaniya
Pratik Agrawal
Mayur Mohta