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Eurasia
April 13, 2018 www.intellinews.com I Page 21
Mongolian anti-corruption authorities detain two ex-prime ministers in mining probe
bne IntelliNews
Former Mongolian prime ministers Saikhanbileg Chimed and Sanjaagiin Bayar were both detained on April 11 by the country’s anti-graft authorities as part of an investigation into allegations of cor- rupt mining payments.
The probe concerns Mongolia’s flagship Oyu Tolgoi copper and gold mine, located in the Gobi desert. Over the weekend former finance minister Bayartsogt Sangajav and two other officials tied to Erdenes Mongol, the state-owned holding com- pany created to hold Mongolia’s shares in mining projects including Oyu Tolgoi and the Tavan Tolgoi coking coal deposit, were arrested.
The investigation dates back to revelations in the leaked Panama Papers that a Swiss bank ac- count in the name of Bayartsogt received dubious money transfers. The Mongolian Anti-Corruption Authority (ACA) is examining the 2009 Oyu Tolgoi investment pact made with Australian-British mining corporation Rio Tinto and signed by the ex- finance minister.
It was previously reported that Saikhanbileg has become the highest-ranking official to find himself enveloped in an investigation into allegations of corrupt mining payments. Saikhanbileg was prime minister from 2014 to 2016, while Bayar held the post in 2009, when the investment deal was signed.
The prosecutor’s office in Ulaanbaatar has applied to extend the detention of both ex-prime minis- ters beyond the permitted 48 hour period — court approval is required in order to hold suspects in detention for longer periods of time.
Former Mongolian prime ministers Saikhanbileg Chimed (left) and Sanjaagiin Bayar (right) were both detained on April 11.
Turquoise Hill, the Canada-listed subsidiary of Rio Tinto which is developing a $5bn underground stage of the Oyu Tolgoi mine, has stated that it received a request for more information from the Mongolian anti-corruption officials. It concerned the “possible abuse of power by authorised of- ficials” during the negotiation of the investment agreement, shortly after Rio took over the pro- ject negotiation from Ivanhoe Mines, the original developer.
Meanwhile, the Swiss Federal Tribunal has upheld the seizure of $1.85mn in Swiss bank accounts
as part of the corruption probe tied to Bayartsogt. The Swiss Office of the Attorney General (OAG) has confirmed it is pursuing an ongoing criminal investigation, including into suspicions that one of the seized accounts was used to transfer $10mn to Bayartsogt in 2008. The probe was originally launched in 2016. Rio Tinto is “not accused”, according to the Swiss probe. Swiss authorities have not yet contacted the company, Rio’s chief executive officer Jean-Sebastien Jacques said in
a Bloomberg Television interview in Beijing two weeks ago.
Ex-prime minister Saikhanbileg, unlike Bayar, is not known for having had any direct involvement with the 2009 investment deal, though he signed an agreement in 2015 for the underground devel- opment of the second phase of the mine, following nearly two years of stalled talks between Rio Tinto and the Mongolian authorities.
Saikhanbileg is, however, linked to the sale of a Russian stake in Erdenet copper mine to the