26 Jun 2020
Mongolia held parliamentary elections on June 24. Two of the candidates are currently under investigation by Swiss prosecutors, who suspect corruption linked to the granting of rights for a massive copper and gold mine in the Asian country.
Politically, the two are running in different provinces. Sangajav Bayartsogt, the former minister of finance, is representing the Democratic Party in the north of the country. Borkhuu Delgersaikhan, a businessman active in the mining sector, is running in the Western Gobi province.
In their various appearances in the run up to the elections, both put themselves forward in the best possible light. But as the Swiss Office of the Attorney General (OAG) has confirmed to swissinfo.ch, a legal case in the works here suggest they share a tarnished track record.
Between December 2007 and July 2008, Delgersaikhan allegedly received some $45 million (CHF42.6 million) into his Zurich bank account, the money sent by a mysterious Chinese investor. From this amount, he then allegedly paid €8.2 million (CHF8.75 million) into a Credit Suisse account belonging to Bayartsogt.
What were the transactions about? A few days beforehand, Bayartsogt had taken up his position as minister of finance, and a few months after, he signed a huge contract with the British-Australian Rio Tinto group, handing them the rights to exploit the Oyu Tolgoi mine in the south Gobi Desert.
It was a good deal for the investors, who reckoned the mine would eventually become one of the world’s biggest reservoirs of copper and gold.
But: in 2013, the Offshore Leaks report revealed that Bayartsogt was the holder of Swiss bank accounts. Embarrassed, the politician was forced to publicly apologise; he then resigned from his job as vice president of the Mongolian parliament.
In an effort to play down the affair, he paid some CHF2.1 million to Delgersaikhan. But the move had an unexpected effect: it raised red flags at the latter’s Zurich bank, which reported the transaction to Swiss authorities.
Swiss courts take up the case
It wasn’t until 2016 that the Swiss justice system woke up. In June that year, a group of Mongolian lawyers launched a legal case in Switzerland against Bayartsogt and others – a case revealed by the SonntagsZeitung newspaper. In turn, Credit Suisse then became worried and reported Bayartsogt – its client – to the Money Laundering Reporting Office Switzerland (MROS).
In August 2016, federal prosecutors finally opened an investigation into money laundering and froze almost $1.85 million in Delgersaikhan’s accounts – suspecting him of acting as an intermediary in corrupting Bayartsogt in the lead-up to the allocation of rights to the Oyu Tolgoi mine.
Delgersaikhan contested the freezing of his accounts at the Federal Criminal Court, then at the Federal Supreme Court, before his appeal was rejected in 2018. For the judges, there was no question: “the fact that such a considerable sum is paid to the minister of a foreign country, immediately after he has taken up his position, is suspicious from the outset,” they wrote in their judgement. Such movements of money are “typical” of laundering schemes, they said.
Contacted by swissinfo.ch, federal prosecutors said that their investigation, originally brought against unknown subjects, has been widened to include the names of the two Mongolian parliamentary candidates – Bayartsogt and Delgersaikhan – as well as a third citizen from the Asian country.
And in April 2020, the prosecutors announced a “sentence order” – a type of criminal judgement – against Delgersaikhan, accusing him of falsifying documents. The businessman rejected this, and will take his case before the Federal Criminal Court.
“This sentence order is the last hope of the Attorney General to keep a case going against my client,” says Manuel Bader, the Zurich lawyer of Delgersaikhan. Until now, he says, all of the charges brought against his client have gone up in smoke.
Criminal investigations in Mongolia
In Mongolia, too, anti-corruption authorities have shown interest in the two politicians and their 2009 dealings. The OAG has confirmed that Mongolia filed a request for legal assistance from Switzerland, which federal prosecutors answered in 2019.
However, the status of investigations in Mongolia is unclear.
By Karine Pfenniger, swissinfo.ch, 25 June 2020
Read more at swissinfo.ch
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