ECONOMYNEXT – The Chinese embassy in Colombo on Tuesday removed Sri Lanka’s state-owned People’s Bank from a blacklist days after it made a payment for an organic fertilizer shipment that government authorities had refused.
People’s Bank settled the disputed payment of 6.87 million US dollars last week to China-based Quindao Biotech Group and honoured its letter of credit (LC) for the organic fertilizer consignment ordered by the Ceylon Fertilizer Company and the Colombo Commercial Fertilizer Company Ltd.
“The Commercial Office wrote a letter to Peoples Bank. It was removed from the negative list after the Bank honoured the LC and the contracts,” a Chinese embassy source told EconomyNext.
“The (blacklist) notice on the website of the Commercial Office is also removed.”
The fertilizer company got a court order barring payments, after the consignment of fertilizer was found to contain the harmful Erwinia bacteria on a post-shipment examination. Agriculture Minister Mahindananda Aluthgamage said the Chinese fertilizer was toxic.
However, China’s Qingdao Seawin Biotech Group Co Ltd demanded 8 million US dollars from the agency, alleging negligence, claiming that Sri Lankan authorities had not followed proper standards in the sample tests.
The company insisted that the fertilizer had been cleared in a pre-shipment examination. Later, the Chinese embassy in Colombo said People’s Bank was ‘blacklisted’ for not honouring the letter of credit.
The court order blocking the payment was vacated on January 03, allowing the People’s Bank to settle the payment. (Colombo/Jan11/2022)