Myanganbayar charged with crime; dispute over mining license

Myanganbayar, owner of "Mongol Gazar Holdings" LLC, gold mining company is charged with economic crime starting Jan 5, 2009, said sources.

Previously, police was saying Myanganbayar was questioned by economic police unit in relation to his borrowings from bankrupt Mongolian banks Anod and Zoos. It is alleged he borrowed large sums of loan from these banks and were unable to repay in schedule during last two years. If it is considered necessary, police may arrest him, said sources.

Largest asset of the MGH is Olon Ovoot-gold mine deposit in Umnugobi aimag. THe deposit is allegedly very rich gold deposit that may contain up to 150 tons of gold.

Mining license of the deposit is used as collateral to get $ 20 mill dollars from Goldman Sachs, US based investment bank. MGH is not fulfilling its responsibility before Goldman Sachs, said sources. Lately, dispute over who is holding the license has emerged. On Wednesday, Mongol Bank receivers of Anod and Zoos banks said Olon Ovoot Gold, a company owned by Mongolian conglomerate Just Group claimed it has the license of the deposit.It is not clear at the moment, if there are two mining licenses for the Olon Ovoot, one kept by Goldman Sachs as loan collateral and another claimed by Olon Ovoot Gold Co.

MGH is 100% owned by Myanganbayar and employes about 2000 people. It was one time, one of largest Mongolian owned gold mining companies. Trouble of the company began when Anod,private mongolian bank bankrupted.

By Ganbat, reporter of MonInfo News Service