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Short-term Bank Loans
 12 Months Ended
Sep. 30, 2013
Short-term Bank Loans [Text Block]
10.

Short-term Loans

(i)         Short term bank loans

As of September 30, 2012 and 2013, the Company had several short-term bank loans with aggregate outstanding balances of $151,381,787 and $151,404,677, respectively. The loans were primarily obtained for general working capital, carried at interest rates ranging from 4.40% to 15.00% per annum (2012: 4.40% to 7.22%), and had maturity dates ranging from 2 to 6 months. The loans are guaranteed by Mr. Xiangqian Li, the Company's CEO, and Ms. Xiaoqiu Yu, the wife of the CEO, who did not receive any compensation for acting as a guarantor. These facilities were also secured by the Company's assets with the following carrying values:

 

 

   2012     2013  
 

For short- term bank loans

            
 

Inventories

 $ 23,863,691   $ 24,505,399  
 

Accounts receivables, net

   -     31,392,774  
 

Machinery and equipment, net

   47,255,604     12,211,038  
 

Land use rights, buildings and construction in progress of BAK Industrial Park

   107,140,980     87,763,440  
 

Land use rights and buildings of Research and Development Test Centre

   -     43,143,525  
 

Land use rights #1 and buildings of Tianjin Industrial Park Zone

   23,970,502     17,857,940  
 

 

   202,230,777     216,874,116  
 

For long- term bank loans (note 12)

            
 

Land use right and construction in progress Research and Development Test Centre

   34,796,887     -  
 

 

            
 

For other long- term loans

            
 

Land use rights #2 of Tianjin Industrial Park Zone

   9,566,555     -  
 

 

 $ 246,594,219   $ 216,874,116  

In August 2013, the Company defaulted on repayment of loans of $32.7 million from Bank of China, and as a result, a court has ordered to freeze all the Company's properties in Shenzhen BAK Industrial Park and Tianjin BAK Industrial Park Zone (Note 1). On August 3, 2013, the Company entered an agreement to pledge the accounts receivable of Shenzhen BAK to Bank of China, Longgang Branch against bank loans of $32.7 million.

During the years ended September 30, 2012 and 2013, interest expenses of $12,855,149 and $13,135,495, respectively, were incurred on the Company's borrowings.