A former member of Anod’s Representing
Administrative Board, N.Davaa, told a press conference some time ago that a
major reason why the bank failed was that the Olon Ovoot gold mine’s license,
kept with the bank as collateral, was taken away without any substitute
mortgage. The Director of Inspection Department of Mongolbank, B.Lhagvasuren,
has now said most creditors of the bank are repaying their loans according to schedule,
but there are some loans which smell of shady deals and his department is investigating
these. He talks about this and other matters.

Is
it true that when Ts.Myanganbayar, head of Mongol Gazar, transferred the Olon
Ovoot license from Anod to Just Group, that meant he had settled his debts to
Anod?

This is the claim of Mongol
Gazar and Just Group. Huge amounts of loans were taken against the Olon Ovoot
license, including MNT10 billion from Anod, and MNT70 billion from Zoos, and from
others like Goldman Sachs. The total amount now due, for which the license is collateral,
is MNT200 billion. We are working on this case. Just is operating Olon Ovoot and
we are in talks with it to see how the debts can be repaid with revenue from
the mine.

Small
borrowers face a lot of trouble getting a bank loan but a big company like Mongol
Gazar was able to take several loans with one license. Doesn’t the central bank
investigate this?

We have studied the papers.
All the concerned banks knew of Mongol Gazar’s debt situation, so we presume that
they agreed to take the risk by giving the company a fresh loan knowing that the
property now being mortgaged had already been pledged to another bank.

Doesn’t
the Mongolbank intervene in such cases?

A bank is a private
organization that works for profit and we should not influence its business
decisions. The responsibility for these lies with them.