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Pledged Deposits

12 Months Ended

Sep. 30, 2016

3.	Pledged deposits

Pledged deposits as of September 30, 2015 and 2016 consisted of the following:

		2015		2016
Pledged deposits with bank for:
Bills payable	$	1,461,757	$	3,305,305
Letters of credit		57,844		-
Others*		-		1,263,722
	$	1,519,601	$	4,569,027

On July 7, 2016, Shenzhen Huijie Purification System Engineering Co., Ltd (“Shenzhen Huijie”), one of the Company’s contractors, filed a lawsuit against Dalian BAK Power in the Peoples’ Court of Zhuanghe City, Dalian for the failure to pay pursuant to the terms of the contract and entrusted part of the project of the contract to a third party without their prior consent. The plaintiff sought a total amount of $1,263,722 (RMB8,430,792), including construction costs of $0.9 million (RMB6.3 million), interest of $30,689 (RMB0.2 million) and compensation of $0.3 million (RMB1.9 million), which we already accrued for as of September 30, 2016. On September 7, 2016, upon the request of Shenzhen Huijie, the Court froze Dalian BAK Power’s bank deposits totaling $1,263,722 (RMB8,430,792) for a period of one year.