KATHMANDU: The German government has formally protested Nepal’s decision to file corruption charges against two German companies involved in Nepal’s electronic passport project, arguing that the allegations are unsupported by evidence and could damage the firms’ reputations and business interests.

According to sources, the German Foreign Ministry summoned Nepal’s Chargé d’Affaires in Berlin, Sagar Prasad Phuyal, on Thursday and handed him a written diplomatic note expressing serious concern over the case.

The protest concerns two German companies awarded contracts under Nepal’s e-passport procurement project: Veridos, a company partly owned by the German government, and Mühlbauer ID Services, a private German firm.

In its diplomatic communication, Germany reportedly argued that while Nepal’s anti-corruption authorities have filed corruption charges related to the passport contract, the charge sheet submitted to court does not contain evidence proving corrupt conduct by either company.

“Our company has not engaged in any corrupt activity. That is why no evidence has been cited in the indictment,” a senior government source quoted the German protest note as stating.

Germany also objected to the prosecution of employees associated with the two companies, saying the allegations have harmed their professional reputations. The note reportedly warned that any politically motivated or premeditated cancellation of contracts with the German firms could expose Nepal to significant legal and financial risks.

The German government further cautioned that if the contracts are terminated, the companies could pursue compensation claims for reputational damage and commercial losses.

According to sources, the Foreign Ministry’s written protest also informed Nepal that employees of the German companies are scheduled to travel to Nepal next week to begin the project’s live implementation phase and requested assurances regarding their safety and security.

The controversy stems from a corruption case filed by Nepal’s Commission for the Investigation of Abuse of Authority (CIAA) over the passport procurement process under prime minister office pressure. The case names officials from the Department of Passports and the Ministry of Foreign Affairs, as well as representatives of the German companies involved in the project.

Under the procurement arrangement, Mühlbauer ID Services was awarded Package 1, covering passport pre-enrollment, enrollment, and data management systems. Veridos secured Package 2, which includes passport personalization, quality control, and packaging systems.