‘There was no record of when and how 888 project lists were submitted’
- By Misheel Lkhasuren -
- Mar 17,2023
The ad hoc committee responsible for reviewing the implementation of projects and programs financed by Development Bank of Mongolia, results, loan issuance and repayment progress, organized the third evidence analysis public hearing from March 13 to 17 at the State Palace.
At the hearing on March 16, three sets of loans granted through commercial banks was discussed, and 78 witnesses were called in connection with the projects. In specific, 888 production projects to support exports and replace imports were reviewed.
Chairman of the ad hoc review committee of Development Bank B.Enkhbayar presented the general opinion on the loan of Bishrelt Group.
During the hearing, the analyst said, “A total of 888 lists were delivered by the Development Bank to commercial banks in April 2014. There was no record of which working group, when and how this list was submitted. Who submitted the list of 888 projects according to what criteria? Therefore, no conclusions can be drawn. The relevant ministry should have the information on what percentage of exports were added and what percentage of imports were replaced, but the ministry did not submit the information.”
Development Bank explained, “From the projects implemented between 2014 and 2020, loans were issued through nine banks related to 888 programs. So far, all but Capital Bank repaid their loans. For Capital Bank, the loan of 26 billion MNT was unpaid in connection with this project. Last year, Capital Bank loan was paid off with real estate. Meanwhile, these loans were not monitored and inspected at that time. When looking at the information related to loan research and analysis, the Development Bank only focused on the repayment of commercial banks.”
“Export promotion program 888 loans are divided into two parts: two billion MNT or less. For projects over 2 billion MNT, commercial banks were given five percent interest and further nine percent interest. The source is a joint source with Credit Suisse bank. In the contract, it was stated that Development Bank has the right to demand the materials to check whether the borrower has used the loan as intended, and if necessary, to monitor the expenditure and withdraw the funds. The archives of the Development Bank were searched for a whole year. No such thing has been found yet. There are reports made in 2018 and 2019. No other reports,” the bank noted.
Parliamentarian B.Enkhbayar said, “Mongol Meat Expo LLC received a direct loan of 31 billion MNT for the construction of a meat processing center, and Mongol Em Impex Concern LLC received a loan of 7.2 billion MNT for the construction of a factory of solid tablets and liquid drops. Unico LLC received a loan of 7.2 billion MNT for the Polypropylene pipe production project, Eternal Trade LLC received a loan of five billion MNT for the cashmere project, and New Danista Row and Construction LLC also received a loan of 3.7 billion MNT for the Panel Furniture Factory project. Karakum LLC received a loan of two billion MNT for the meat processing plant project, and Yalguun International LLC received a loan of 1.9 billion MNT for the construction of a lime plant. A total of 59.085 billion MNT loans were obtained directly from the Development Bank and from commercial banks.”
In the second evidence analysis hearing, the utilization, expenditure and results of loans granted to 355 projects and measures with the condition of repayment from the state budget were reviewed. Meanwhile, during the first hearing, which lasted until January 20, the spending of 77 loans directly granted by Development Bank was heard in detail, experts’ opinions were reviewed and the relevant witnesses were asked.