Court Orders Release of JKH’s Detained BYD EV Fleet amid Duty Row

Sri Lanka’s blue-chip conglomerate John Keells Holdings PLC (JKH) has won a crucial legal relief in its high-profile electric vehicle (EV) venture, as the Court of Appeal ordered the release of 625 BYD electric vehicles detained by Sri Lanka Customs (SLC) over allegations of import duty manipulation.

The order, issued by Court of Appeal President Justice Rohantha Abeysuriya and Justice K. Priyantha Fernando, directed Customs to expedite the release of the vehicles under bank and corporate guarantees, as specified in a motion filed by the Customs Department. The case stems from a dispute over the motor capacity classification of certain BYD vehicle models imported by John Keells CG Auto (Pvt) Ltd, a joint venture between JKH and Nepal’s Chaudhary Group (CG Corp Global).

Appearing for the Director General of Customs, Senior Additional Solicitor General Sumathi Dharmawardena, PC, informed the court that Customs had agreed to release the models BYD Atto 2 Premium (70kw), Atto 1 Dynamic (45kw), Atto 1 Premium (45kw), and Dolphin Dynamic (70kw) on corporate guarantees. Additionally, the Dolphin Standard (49kw) and Sealion 7 (100kw) models will be released upon submission of bank guarantees.

Accordingly, 130 Atto 1 Dynamic and 74 Atto 1 Premium vehicles will be released under corporate guarantees, while 232 Dolphin Standard and three Sealion 7 units will be cleared under bank guarantees. However, six vehicles will remain in Customs custody to facilitate motor capacity testing.

The JKH–CG partnership, known as John Keells CG Auto, launched its first showroom in Colombo in 2024, marking a major milestone in Sri Lanka’s transition to green mobility. Expansion plans are already in motion for Kurunegala, Ratnapura, and Ampara, with deliveries of the BYD Sealion 6 SUV scheduled for early 2025.

Despite its promise, the venture has been marred by controversy over duty classification and customs valuation, casting a shadow over what was expected to be one of the country’s most significant EV rollouts. The ongoing legal proceedings highlight the regulatory and compliance risks surrounding emerging electric vehicle imports in Sri Lanka.

The current dispute also mirrors past controversies involving CG Motors in Nepal, which faced allegations in 2023 of duty manipulation after reclassifying King Long minibuses to pay lower taxes, resulting in an estimated NPR 14.5 million revenue loss to the Nepali government. CG Motors was later compelled to repay misclassified duties on KYC-branded electric vans, while its operations involving XPENG, Neta V, and GAC Aion EVs drew further regulatory scrutiny.

Adding to the scrutiny, CG’s acquisition of a 70.8% stake in Union Bank of Colombo, executed via a Dubai-based entity and registered in Singapore, has raised governance and regulatory concerns, as it places Nirvana Chaudhary at the helm of the bank while he remains a director at Nepal’s Nabil Bank.

For JKH, the partnership with BYD represents a bold strategic step toward sustainable mobility and alignment with Sri Lanka’s climate commitments. Yet, the unfolding legal and governance issues underscore the urgent need for stronger oversight, regulatory consistency, and transparency in the country’s fast-evolving EV sector.