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Mongolian media space blew up on 16 May with the report on systemic corruption surrounding the State Educational Loan Fund. Based on the audit data in the report, the fund has been ridden with violations and corruption since 1997, when it started issuing loans to students pursuing higher education abroad. The list of all loan recipients, including their names and remaining loan amounts, was published on 22 May, further exposing the scale of corruption and mounting pressure to pay back the loans. Independent investigation illustrates lack of transparency and competition in the allocation of loans. O.Batnairambal, who was the first one to bring this case to the public’s attention, to learn about the State Educational Loan Fund and the corruption surrounding it. Batnairamdal is a former Deputy Minister of Mining and Heavy Industry of Mongolia and the International Secretary of the ruling Mongolian People’s Party. Regarding the fund, it is not a scholarship fund, it is a loan fund. It was established in 1993 to provide financial support to students who lacked funds to cover their higher education costs at local universities. In 1997, the fund expanded to students who wanted to study abroad. It is still a mystery what are the criteria for receiving loans. The easiest criteria is for a bachelor’s degree. Students have to enroll into a top 100 global university. However, more than one third of all recipients got loans despite their universities not being in the top 100. Also, there are preferred majors as a criteria. If students got into a top 20 university it did not matter what major they pursued. If they got into universities ranked between 20 and 100, there were some preferred majors defined by the government, such as mining and engineering. Up until 2012, student loans were written off under the condition that recipients returned to Mongolia and worked for five years here. In 2012, the government issued a decree, which changed this term. Everyone who received a loan after 2012 has to pay back their loan in full. It is 30 percent of the total amount issued for higher education. According to the current exchange rate, it is MNT 363 billion (around USD 103 million). This amount was issued to 2,368 students, pursuing undergraduate and graduate degrees from foreign universities. In 2021, the government adopted the Public Information Transparency Law as part of the initiative to fight corruption. This law allowed access to information, previously not available to the public. I used publicly available information and analyzed it to understand what has happened in the last 30 years and how the fund has been abused. The main finding of the two-month long investigation is that 90 percent of the loans were issued to high level officials, their children, and those who had access to closed information. There was no transparency or fair competition. The second finding is that the payback ratio is less than one percent. People always get confused and think that it is a scholarship fund. The 2011 Law on Higher Education and Social Security of Students states that it is an educational loan. People wrongly assume it is a scholarship. That is something I debunked in my report. The third finding is that 41 percent of the funds allocated to students pursuing master’s and doctoral degrees have been unlawfully written off by ministerial decrees since 2012. It is unlawful because article 8.8 of the law on higher education specifies that anything related to writing off loans issued through a specific fund can be regulated only by the parliament. All the ministerial decrees that wrote off loans are unlawful. It is not my personal conclusion, that is what the audit report by the state audit committee specified in their report.

Former member of parliament B.Undarmaa was sentenced on Tuesday (11 Aug) to two years and six months in prison for the abuse of power. B.Undarmaa was found guilty of abusing power to obtain a low-interest loan of MNT 700 million (USD 245,800) from a fund specifically for developing small and medium-sized enterprises. Mongolia has been intensifying its efforts against criminal cases related to abuse of power and corruption. Since the beginning of this year, the country has sentenced more than 20 high-ranking officials, including three former prime ministers – M.Enkhsaikhan, J.Erdenebat and S.Bayar — to prison. The 56-year-old served as a parliament member from 2016 to 2020.

The trial of former PM S.Bayar and other six people started at the Ulaanbaatar’s Chingeltei Criminal Court today (15 June) at 09.00 a.m. However, the trial was postponed to 18 June after lawyers and one of the defendants – former finance minister S.Bayartsogt – simply did not show up in the court because he was away election campaigning in Selenge province. Therefore, the court has issued a bail of MNT 5 billion to S.Bayartsogt and MNT 10 billion to S.Bayar. In other words, if two MPs failed to pay these very high bail fees, then they will be imprisoned. Former Prime Ministers S.Bayar and Ch.Saikhanbileg were arrested by the the Independent Authority against Corruption (IAAC) in 2018. The IAAC is investigating into possible abuse of power by certain government officials during the negotiations for the Oyu Tolgoi agreements, namely the Investment Agreement between the Government of Mongolia and Ivanhoe Mines Mongolia Inc LLC and Ivanhoe Mines Ltd and Rio Tinto International Holdings Limited, signed on October 6, 2009, and the Oyu Tolgoi Underground Mine Development and Financing Plan, signed on 18 May 2015. Former Prime Ministers S.Bayar, who was in office in 2007-2009, and Ch.Saikhanbileg, who led the Cabinet in 2014-2016, has thus been put under arrest in the course of the investigation.

Chingiltei District Court has granted a request to extend imprisonment of B.Gankuyag, ex-chief executive of Erdenes-Tavantolgoi JSC, for a month. On 8 December, B.Gankhuyag and several associates as well as family members have been arrested and await trial, accused of embezzling billions of dollars in coal revenue. The anti-corruption department and the General Police Department conducted a joint enforcement operation and arrested several people. The arrests came after December protest over corruption in the country’s coal trade. Starting next month, Erdenes-Tavantolgoi JSC — the country’s largest state-owned coal miner — will cease signing direct sales contracts with buyers in neighbouring China, which last year purchased 84 percent of Mongolia’s total exports. Instead, the company’s coal will be auctioned on the Mongolian Stock Exchange.

Mongolia’s controversial former president, N.Enkhbayar, will not be allowed to stand in the parliamentary election next month because of registration irregularities and his conviction for corruption in 2012, the election commission said. N.Enkhbayar applied to register as ‘Your and Our Coalition’ party’s candidate for the Bayangol District of Ulaanbaatar to the General Election – however, the registration was denied. N.Enkhbayar was banned from standing for the presidential elections in 2017 because of the same reasons. He served as the country’s prime minister from 2000 to 2004, as speaker of the parliament from 2004 to 2005, and as the president of Mongolia from 2005 to 2009. Mongolia is expected to hold general elections on June 24.

Transparency International and ARTICLE 19 today (30 April) called on the Mongolian government to take urgent legislative action to address an increasingly dangerous environment for the independent media in the country. In January, Article 13.14 of the Mongolian Criminal Code came into effect. This provision stipulates that disseminating false information can be punished by fines equivalent to approximately €300 – €900 Euros, 240 – 720 hours of community service, or restriction of the right to travel for one to three months. Mongolian press freedom and anti-corruption activists are concerned that the law does not define the term ‘false information’. In practice, they say, police, prosecutors and judges involved in criminal defamation cases are not considering the accuracy of information reported in the media or proving that it is false when charging people under the law. Article 13.14 should be urgently repealed, the organisations said. Previously in Mongolia, defamation cases were brought under Article 6.21 of the Law on Administrative Offences. In the first few months of this law coming into effect in late 2017, over 100 journalists were charged, many in cases brought by politicians. “Unfortunately, Mongolian public figures do not seem to accept that tolerance of criticism and accountability for their actions is part of the job,” said Ilham Mohammed, Asia Pacific regional advisor at Transparency International. “Previous defamation laws were widely used by politicians and business groups to silence critical voices, and now harsher, criminal legislation looks set to continue that trend with potentially dire consequences for independent media voices in Mongolia.” In addition, Mongolia’s 2017 law on state and official secrets allows virtually all information to be classified as a state or official secret, leading in some cases to the prosecution of journalists exposing corruption. The country’s Law on Access to Information has not yet been fully implemented, almost a decade after being passed into law.

Starting from February, Mongolia’s largest state-owned coal enterprises, Erdenes-Tavantolgoi JSC, will stop signing direct sales agreement with Chinese buyers. Instead, the company’s coal will be auctioned on the Mongolia Stock Exchange, which will increase transparency and ultimately bring higher returns to the country. The move to sell coal through the exchange comes in response to the protest against widespread fraud in the coal industry, where much of the theft was allegedly conducted by off-the-books coal sales with Chinese buyers at the border. Therefore, “Erdenes Tavantolgoi” company is planning to launch online trading of coal on the exchange between 8-10 February. Therefore, a tender for transportation of coal from mine to the border has been announced. It is expected that over 200 companies will participated in the tender. There are 55 Chinese companies which expressing their willingness to buy coal through the exchange, according to Special Representative of the Government in “Erdenes Tavantolgoi” J.Ganbat. Earlier this month, the stock exchange organized a trial run trade to test the new system — 12,800 tonnes of coking coal was auctioned to a Singapore-based coal transporter. The final call price had increased 12.2 percent above the original asking price, from 1,150 yuan/tonnes to 1,290 yuan/tonnes. The company is planning to sell about 200,000 tons of coal on the exchange in the first phase. “Erdenes Tavantolgoi” JSC plans to export 23 million tons of coal this year. The Mongolian government promised to end years of shady coal deals after people staged a massive anti-corruption protest in Ulaanbaatar last December. The company’s CEO B.Gankhuyag and several associates as well as family members have been arrested and face trial on charges of embezzling billions of dollars in coal revenue. Mongolia is one of key significant coal suppliers for China, especially for coking coal used for steel making. Mongolia’s coal exports came in at 31.69 million tonnes in 2022, surging 101.72 percent or 15.98 million tonnes year on year, showed data from the Mongolian Customs General Administration. A total of 29.77 million tonnes were exported to China, soaring 104.50 percent year on year, representing 94 percent of the total.

Mongolia’s Anti-Corruption Agency announced yesterday (13 December), names of 17 individuals who involved in a coal theft scandal which caused two week long demonstration in Ulaanbaatar, the country’s capital city. Following officials were directly or indirectly involved in the theft of coal;

1. Former President of Mongolia Kh.Battulga /Democratic Party/

2. Former Speaker of the Parliament Z.Enkhbold /Democratic Party/

3.O.Shijir, former head of the Office of the President of Mongolia /Democratic Party/

4. Former Minister of Road Transport Development D.Ganbat /Mongolian People’s Party/

5.Member of Parliament A.Adyasuren /Democratic Party/

6.Member of Parliament D.Bat-Erdene /Democratic Party/

7.Member of Parliament T.Anandbazar /Mongolian People’s Party/

8.Member of Parliament N.Naranbaatar /Mongolian People’s Party/

9.Member of Parliament B.Battumor /Mongolian People’s Party/

10.Member of Parliament Ts.Sergelen /Mongolian People’s Party/

11.Member of Parliament Sh.Radnaased /Mongolian People’s Party/

12.The governor of South Gobi province R.Seddorj /Democratic Party/

Mongolians are firmly protesting against a “coal mafia”, led by ex-President Kh.Battulga who have apparently robbed the public purse of billions of dollars. The government investigation committee is considering about 1 million tonnes of coal may have been released without registration. During the investigation, it was revealed that 207,000 tons of coal exported to China without Mongolian customs registration between 20 May and 20 June, 2017, inspectors at the time determined that 3,758 coal haul trucks were registered as “empty” at customs.

Sh.Batkhuu, former director of the ‘Just Group’ was sentenced on 22 October to eight years in prison and ordered to pay MNT 140 billion to compensate the government after years of investigation and court delays. However, the Khan-Uul District Court dismissed charges against five others involved in the notorious case of South African Standard Bank. Back in 2013, Mongolia’s anti-corruption agency begin investigating Sh.Batkhuu in connection to his offering up the Erdenet Mining Corporation as collateral for USD 110 million loans obtained from the South African Standard Bank. The case began to be heavily publicised after the London Court of International Arbitration ruled in favour of the South African Standard Bank. According to Deputy PM U.Enkhtuvshin, the Mongolian Government has paid USD 40 million to the Standard Bank from EMC’s Emergency Fund.

Officers from the Independent Authority against Corruption of Mongolia have raided Tavan Bogd Group President Ts.Baatarsaikhan’s office. According to official sources, the raid was carried out by the IAAC as part of an ongoing investigation into the Health Insurance Fund. Ts.Baatarsaikhan, who is one of the major shareholders of the Khan Bank, is suspected for embezzlement of MNT 1.8 billion from the Health Insurance Fund.

Earlier today (8 April), the General Prosecutor’s Office of Mongolia reported a review of cases for the first quarter of 2020. The most high-profile cases are as follows:

Former MP B.Bolor,

MP D.Ganbat,

MP D.Erdenebat,

and N.Zoljargal

at the time President of Central Bank of Mongolia, were charged with the abuse of power and taking advantages over illegally transferring 49 percent of the Erdenet Mining Company. Ganbat, former Minister of Road and Transport Development and D.Dorjkhand, Director General, Policy Implementation Department were charged with the abuse of power and corruption on 31 March. The case has been transferred to Primary Criminal Court of Sukhbaatar District. MP D.Damba-ochir and G.Soltan were charged with the abuse of power, taking advantages over SME Fund overseen by the Ministry of Agriculture and Light Industry.