BYD’s Sri Lanka Debut Shadowed by Court case, Nepal Tax Issue

BYD’s Sri Lanka steering into electric mobility Shadowed by Nepal CG Corp Tax Issues

Sri Lanka’s biggest blue-chip, John Keells Holdings PLC (JKH), is steering into electric mobility through a high-profile partnership with Nepal’s Chaudhary Group (CG Corp Global) to distribute Chinese automaker BYD. The joint venture, John Keells CG Auto (JK CG Auto), launched BYD showrooms in Colombo in 2024 and is preparing expansions in Kurunegala, Ratnapura, and Ampara.

The partnership unveiled BYD’s Sealion 6 SUV last year, with the first deliveries expected in March 2025. Union Bank of Colombo acquired by the Chaudhary Group in 2023 has signed on to provide financing for BYD purchases.

Yet the initiative has come under legal spotlight. In Colombo, JK CG Auto is currently facing proceedings in relation to BYD vehicle imports. According to court filings, the issue concerns the classification of vehicles under customs regulations and the corresponding duties.

The matter is ongoing before the judiciary, and no outcome has yet been determined. The case resonates with earlier controversies in Nepal involving Chaudhary Group’s auto arm, CG Motors.

In 2023, the company imported 30 King Long minibuses under HS code 8702.40.30, paying a 10 percent duty.

Months later, 50 identical vehicles were brought in under HS code 8702.40.20, classified as “15-seater minibuses,” slashing the duty to 1 percent. Nepali regulators said the move, which added auxiliary seats to exploit a loophole, resulted in tax shortfalls of nearly NPR 14.5 million.

CG Motors has previously been ordered to repay duties over the misclassification of KYC-branded electric vans. Regulatory scrutiny in Nepal has also extended to other EV brands it distributes, including XPENG, Neta V, and GAC Aion.

Meanwhile, CG’s financial dealings in Sri Lanka have raised governance concerns. Its 70.8 percent acquisition of Union Bank of Colombo in 2023 was carried out through a Dubai-based entity.

The deal was executed in Singapore, placing it outside Sri Lankan jurisdiction. Following the acquisition, Nirvana Chaudhary was appointed chairman of Union Bank, while also serving as a director of Nepal’s Nabil Bank.

For JKH, the BYD partnership combines brand value with global EV technology, potentially placing Sri Lanka at the forefront of the broader region's going green. But with ongoing events in Colombo and a track record of overseas regulatory challenges, the initiative also calls for investor and regulatory scrutiny.

As Sri Lanka steers towards electric mobility to decrease the importation of fuel and reach climate targets, the success of BYD's venture will not just lie with the automobiles it sells but with the safeguards surrounding the administration of the companies bringing them in.

Bandula Sirimanna

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