Kathmandu, April 9 -- On a spring day in 2020, during the height of Nepal's Covid-19 lockdown, police stopped a vehicle bearing diplomatic number plates and found 67 thermal guns inside. The devices, which sold for Rs 5,000 apiece, were allegedly being moved for resale at three times the price. The man in the vehicle was Sulav Agrawal, scion of the Shankar Group - one of Nepal's oldest and most prominent business conglomerates - and, at the time, the country's honorary consul general for Kyrgyzstan. He was arrested on the spot.

The arrest didn't seriously damage the Shankar Group's business. But it shook its reputation, and more consequentially, it introduced the family to Deepak Bhatta - a well-connected businessman who, through a combi...