Malaysia is earning a bad image in Nepal following the visa fee hike of about 450 percent since Nov 1 last year - from RM23 to RM130.

This fee hike, which affected mostly Nepali workers, is going to a Malaysian company engaged by the "political mafia in Malaysia", reported Kantipur Daily, Kathmandu's Nepali language newspaper.

A Nepali company, VLN Nepal, which works closely with its Malaysian counterpart allegedly linked to the "political mafia", has so far collected about RM21 million in visa processing fees operating inside the Malaysian Embassy.

Last month, Nepal's Labour and Employment Minister Tek Bahadur Gurung ordered an official team of investigators from his ministry's department to investigate the visa processing fee hike by VLN Nepal.

The increase in visa processing fee has to be resolved through diplomatic channels, a spokesperson of the Labour Department Badri Karki told Kantipur Daily.

"We have investigated the ways the VLN Nepal works and we have submitted a report to the ministry's department."

The Labour Department official said: "There is no way the government of Malaysia can take commission in the name of visa processing fee through an office located in its premises."

"This is like the wrapping of the biscuit is more expensive than the biscuit."

When queried, VLN had shown an authority letter issued by Malaysian Immigration and Malaysian embassy in Nepal saying that VLN could collect Rs3,900 (RM130) per person for visa processing.

Early last month in a meeting with Home Minister Ahmad Zahid Hamidi in Kathmandu, Nepali representatives said that the country’s migrant workers could not afford any additional cost since they are already spending excessive recruitment charges.

The Nepali government had also resisted Malaysia’s proposal to introduce Bio-Visa, arguing that it would add financial burden to Nepali migrant workers.

Foreign workers being cheated

According to Kantipur Daily, the Labour Department suspects that all the workers who come to Malaysia for work are being cheated.

"We believe some Malaysian companies, which are backed by politicians, are involved in this syndicate," the labour official said.

To resolve the problem, and amend the ruling, the Labour Department had in its report proposed that the fee hike could be resolved through diplomatic channels.

"We cannot raid the office of VLN because the visa fee collection office is located in Embassy of Malaysia in Kathmandu. Nepal is a signatory to the Vienna Convention so we cannot go raid another country’s embassy and this can sour the diplomatic relations between Malaysia and Nepal," the labour official said.

Two months after the high visa fee was introduced Nepal's The Himalayan Times reported VLN Nepali was alleged to be involved in another "shady deal" involving the remittance of a large sum of money visa processing money to an unnamed firm in Hong Kong.

According to the report, VLN Nepal had last month filed a request at the country's central bank to transfer around Rs30 million (RM997,000) to Hong Kong.

"This money is Malaysian government's money and we have no problem in availing foreign exchange facility for transfer of this fund to Malaysia," the bank official was quoted as saying.