The German Federal Foreign Office called Nepal's Chargé d’Affaires to Germany, Sagar Prasad Phuyal, to its office and expressed serious concern over the Commission for the Investigation of Abuse of Authority (CIAA) filing charges against German companies.
Similarly, the German government-owned company Veridos sent a formal letter to the CIAA the day after the case was filed against it. A copy of the letter was sent to the Prime Minister’s Office, the Ministry of Foreign Affairs, the Department of Passports, and others.
During the meeting with Phuyal on June 25, the German Foreign Ministry expressed dissatisfaction, stating that the charges had been filed against its companies "without evidence."
In a previous report, we had written that the German government had sent a protest letter to the Nepali government regarding the passport contract case. However, the German Embassy in Kathmandu clarified on its Facebook page on Wednesday that the German government had not sent any protest letter to the Nepali government.
We would like to correct the error in that report: the letter was written by the German government-owned company Veridos to the CIAA and was emailed to the Prime Minister’s Office, the Ministry of Foreign Affairs, and others.
Furthermore, the German government conveyed its serious concerns to the Government of Nepal through Chargé d’Affaires Phuyal.
We express regret and apologize for the confusion caused to our readers due to the mix-up of some facts in our reporting. We have always corrected factual errors in our stories in the past and will continue to do so. This is our clear policy.
However, as we wrote in the previous story, the issues raised by the German government with Nepal’s representative and those mentioned in Veridos’s letter to the CIAA and the Nepal government are serious.
According to a high-level government source, during the meeting with Chargé d’Affaires Phuyal, the German government stated that the charge sheet filed by the CIAA against its companies did not contain clear evidence, questioning whether the CIAA's investigation was robust, clean, and impartial.
The source said the German government also warned that terminating the contract with its companies in this situation would damage Nepal’s international reputation.
Foreign Minister Shishir Khanal had cautioned the team from the prime minister’s secretariat that the contract with the German companies could not be terminated while the time given them to print passports still remained, as doing so would invite the risk of "international arbitration."
Minister Khanal had convinced the prime minister’s secretariat on Monday that other options should be considered only if the companies failed to print passports within the given timeframe.
As Minister Khanal stated, during the meeting with Chargé d’Affaires Phuyal, the German government had also warned that if the Nepal government terminated the contract, it would face significant financial and legal risks, potentially leading to “international arbitration.”
Similarly, the high-level source said that Veridos, the German government-owned company, also raised serious issues in its letter sent to the CIAA on June 23 – the day after the case was filed against it – and emailed to the Prime Minister’s Office, Ministry of Foreign Affairs, Department of Passports, and others.
Two senior officials told Setopati that they have read the letter.
In the letter, Veridos claimed that the tender process was completed with full transparency, following all proper procedures and complying with all applicable laws and conditions. According to the officials, Veridos wrote that it had operated in accordance with “the highest legal and ethical standards.”
Veridos stated that it had fulfilled all responsibilities as per the agreement and that it was ready to print “live passports” according to the schedule set by the government.
The letter also mentioned that if the project were stopped or postponed at this stage, it would have serious negative consequences for Nepal.
One senior official who read the letter said Veridos indirectly signaled that if the contract were canceled, the company would proceed to “international arbitration.”
The official quoted Veridos as writing: "Should our company suffer damages for any reason, we will exercise the rights and remedies provided for in the agreement."
The officials said that one of the two signatories of the letter to the CIAA was Fabiola Bellersheim, who is one of the four German citizens charged by the CIAA. She is the vice-president of Veridos.
The attempt by members of the prime minister’s secretariat to cancel the contract with the German companies and procure passports from the previous French company, Idemia, has been temporarily halted for now. Foreign Minister Khanal has pushed back against the move.
The Prime Minister's Office had previously pressured the CIAA to file charges in the contract case, alleging corruption in the awarding of the contract to the German companies and claiming that they would not be able to print passports on time.
On June 15, three CIAA officials and employees including Chief Commissioner Prem Rai were allegedly “detained” for 8-9 hours inside the Prime Minister’s Office, saying they would not be allowed to leave until charges were filed in the passport contract case.
After being confined in Singha Durbar and under pressure from the prime minister’s secretariat team, CIAA officials issued arrest warrants for Department of Passports Director General Tirtha Raj Aryal and IT Director Sunil KC from there. They were arrested on the spot while waiting in another room of the Prime Minister’s Office.
Following these events, the prime minister's secretariat increased pressure on Foreign Minister Khanal to terminate the contract with the German companies.
Khanal stood his ground, insisting the contract should not be broken before the deadline given to the German companies.
When Minister Khanal did not comply, Madhav Khanal from the prime minister’s secretariat pressured Joint Secretary Deepak BK, who is in charge of the Department of Passports, to terminate the contract immediately.
After Minister Khanal instructed the Department of Passports not to yield to pressure from the prime minister’s team and to focus on printing new e-passports on time, the department has been working on that.
Minister Khanal has been visiting the department almost daily for monitoring.
