Kathmandu-It has been revealed that passport printing commissions were paid abroad through offshore companies.

The French company Oberthur Technologies (now operated as IDEMIA), which has handled passport printing since 2010 and has transferred commission payments to Capital Biz Solution Pvt Ltd, a Singapore-registered firm.

 Insiders say this  practice violates Nepal's anti-corruption and money laundering laws.

On August 27 , 2010, the Department of Passports signed a contract with Oberthur for the printing, supply, and personalization of 4.5 million Machine Readable Passports (MRPs).

The company received payments from the Government of Nepal and routed commissions to a Singapore-registered company.

Before the Singapore firm was incorporated, payments went to Regent City Far East Limited, a Hong Kong-registered company. On February 22, 2011, the company received $132,210 US as commission for passport printing, supply, and personalization.

On February 1, 2012, it received another $108,821 for 100,000 passports.

Later, Capital Biz Solution Pte Ltd was established in Singapore in October 2012 with five Nepali shareholders. After its formation, commission payments were redirected to this company.

On January 3, 2013, it received  $211,200  for 600,000 passports.

The company also received $8,800 in August 2013 and again in December 2013.

In 2014, payments included $17,600 on January 7, 35,200 on April 30, $17,600 on August 3, and multiple December payments totaling 26,400 .

In 2016, further payments were made, including $44,000 in March, $383,563.78 on April 15, $8,800 on June 24, $8,800 on September 21, and $11,986 on December 27.

Records show Oberthur transferred a total of $969,781 in commissions to Capital Biz Solution Pte Ltd in Singapore and Regent City Far East Limited in Hong Kong. Similar payments are reported to continue.

Oberthur entered Nepal’s passport system in 2009 after signing a contract for 4.5 million MRPs.

The agreement set the price at $3.59 per passport and ended on December 8, 2015. A planned retender did not proceed, and the contract remained extended.

After the April 2015 earthquake, the department extended the contract through variation orders due to stock shortages. It added 2.5 million MRPs and later another 200,000 MRPs.

In total, Oberthur handled 7.2 million MRPs.

In 2020, the department signed another agreement with IDEMIA for 2 million electronic passports. Through variation orders, this increased by 3.8 million, bringing total e-passport production to 5.8 million.

Overall, IDEMIA has handled 13 million passports, including MRPs and e-passports.

A new supplier has been selected, but IDEMIA continues work due to remaining stock. About 170,000 passports are still pending.

The report says the company maintained a monopoly and routed commissions abroad, raising concerns over foreign exchange violations.

Officials estimate nearly 10 million may have been moved.

The company has also filed court petitions after the new supplier selection, allegedly to delay the process.

The Public Procurement Regulations require that, in global tenders, local representatives or companies engaged for support must be clearly disclosed along with any commission paid to them. It also requires that such commissions be paid within Nepal.

The regulations  further state that when a foreign bidder appoints a local agent in Nepal, the bidder must clearly disclose the agent’s name and address, the commission amount, the currency and payment method, and any other terms of the agreement.

If a local agent is involved, a certified copy of the tax registration certificate and a letter of acceptance of the agency must also be provided.

However, in this case, the procurement contract does not disclose the local representative or the commission structure.

Delta Core Pvt Ltd was listed as a partner or subcontractor, but records show it approved overseas payments.

The five shareholders of Delta Core Pvt Ltd are also shareholders in Capital Biz Solution Pte Ltd in Singapore.

They include Siddhartha Raj Pandey, Sharad Gurung, Bibin Basi, Arjun Gurung, and Bijay Raj Pant.

These individuals are linked to both firms. Investigators allege commissions meant for Nepal were routed abroad, causing capital flight and fund concealment.

A former finance minister said the Lauda Air case lacked evidence of foreign payments, which weakened the investigation. In the Airbus procurement case, payment records led to a refund to the government.