L.Oyun-Erdene reports on fundraising scheme for Erdenet’s 49% stake deal

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  • Mar 06,2019
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Head of the Cabinet Secretariat L.Oyun-Erdene held a press conference about the privatization of Erdenet Mining Corporation (EMC) on Monday at the State Palace.

Mongolian Copper Corporation (MCC) bought 49 percent of EMC from the government of Russia and Russia’s state-owned Rostec Corporation in 2017.

L.Oyun-Erdene reported on how MCC raised funds to buy the 49 percent EMC stake.

He highlighted that MCC had paid 400.27 million USD to buy the 49 percent stake of EMC, but MCC took 72.4 percent of the funding from state funds, and only 27.6 percent came from private funding, mostly from Trade and Development Bank (TDB).

L.Oyun-Erdene emphasized that MCC’s fundraising scheme was carried out through “illegally structured sources” by “breaking” a number of Mongolian laws, and showed a board on which the fundraising scheme was illustrated.

According to the scheme, 62.9 million USD from the Ministry of Finance, 56.5 million MNT from Mongol Bank and Development Bank, and 283 million USD from the Ministry of Industry, Mongol Bank and TDB went into the account of MCC for the purchase of the 49 percent stake in EMC from Russia.

The head of the Cabinet Secretariat believes that Board Director of TDB D.Erdenebileg is behind this purchasing scheme.

L.Oyun-Erdene said that a handful businessmen and politicians are using Ts.Purevtuvshin, the director of MCC, to further their interest, and Ts.Purevtuvshin should realize that he is being taken advantage of by these people.

The head of the Cabinet Secretariat said that after law enforcement authorities finalized MCC’s purchasing process for EMC’s 49 percent stake, MCC can sit down with the government at a negotiating table.

Head of the General Police Department’s Press Center, Deputy Colonel B.Baatarkhuu stated on Tuesday that it has set up a task force with the Independent Authority Against Corruption and investigating issues related to the privatization of EMC. As part of the ongoing investigation, Director of the board of TDB D.Erdenebileg, CEO of TDB O.Orkhon, and Director of MCC Ts.Purevtuvshin were arrested on March 5 for interrogation.

B.Baatarkhuu refused to disclose further information as the case is ongoing but said that once the investigation is over and the General Police Department receive approval from the prosecutor, the police will provide more information.