Goldman Sachs is believed to have filed a case against Mongolia in an international arbitration court in matters relating to Mongol Gazar and the Olon Ovoot mines. This news comes in the wake of unconfirmed but strong reports that the Mongolian Government has lost the case against the Russian-owned Altan Dornod. B.Lhagvasuren, director of Mongolbank’s Inspection Department, has said he has no information about Goldman Sachs filing any case.

Ts.Myanganbayar’s failure to pay his debts to Anod and Zoos banks was a major reason for their dismal failure. Myanganbayar, a business magnate, pawned the Olon Ovoo license to five banks and Goldman Sachs to borrow a total of MNT 210 billion. Of this, Zoos Bank, now known as Government Bank, gave him MNT 60 billion, Anod MNT 30 billion, and Goldman Sachs MNT 15 billion.

Goldman Sachs is a global investment banking and securities firm but is not registered in Mongolia, nor does it have any representative here. A man with only a visiting card has been representing Goldman Sachs to meet Mongolian officials. Nobody knows anything more about him, ort what position, if any, he holds at the company. The Mineral Department agreed to the mortgage of the mining license to Goldman Sachs in violation of the basic regulation that mining licenses can be mortgaged only to banks or non-banking financial organizations, when the company has no legal standing in Mongolia.

One way out of the imbroglio can be to take Olon-Ovoot under state ownership. D.Enkhtuya, director of the Olon Ovoot Gold Company which now holds the license, has, however, pledged to pay back all debts by operating the mine. 

Olon Ovoot is run under 18 licenses. Some, however, put the number at five. Mongolbank says it is difficult to find the truth because Myanganbayar pawned the licenses under the names of different companies.