BOK and Himalayan Bank win legal case in China

Kathmandu: Bank of Kathmandu (BOK) and Himalayan Bank will get back Rs 1.40 billion from China Construction Bank due to counter guarantee. The Zhengzhou Intermediate Court in Henan Province has ordered that both banks’ money be returned.
According to the Bank of Kathmandu a letter will be sent to China Construction Bank today to return the money as soon as the decision is in favor of the bank. Both of the Nepali banks have received the verdict of the court.
The verdict has been in favor of both the Nepali banks. Earlier, the contractor company China Railway Company had received guarantee amount from Himalayan and BOK in Nepal through China Construction Bank during the construction of Melamchi Drinking Water Project.
Meanwhile, after the contractor company left the work, the amount already provided by the Nepali banks to the company was inactive. According to Pant, BOK had provided a guarantee amount of 66 lakh 25 thousand 10 US dollars (788.3 million).
Similarly, Himalayan Bank had lost about Rs 620 million. After leaving Melamchi’s work, the contractor company had filed a petition in the Zhengzhou Court here alleging that Nepal’s banks had committed fraud.
The court then ruled in favor of the petitioner. Later, Nepal’s banks went to the high court. The high court had ordered the lower court to reconsider the decision, saying it was not in line with international banking practices and Chinese law.
Pant said the hearing was held in August. Now, the losing company can go to the high court against the court order.
However, Pant said that the high court had earlier asked the lower court to reconsider and now it is believed that the money will be received.