ERDENEBILEGISM III – THE DEPRAVITY OF THE MONGOLIAN STATE

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ERDENEBILEGISM is a 21st century phenomenon consolidated in Mongolia beyond doings or the character of an individual named Erdenebileg Doljin. The realities of major cases such as SME funds theft, Educational Loan Fund, Development Bank, coal theft scandal were uncovered at least partly thanks to fightings between factions under the name ‘hearings’, proving that there are plenty of Erdenebilegs in Mongolia nowadays. The political structure in our country as well as governance, public opinion and their choices continue to nurture and strengthen Erdenebilegs. Every single branch of the state are plagued by corruption and oligarchs in politics and finance have managed to reach state capture.

Despite some level of discussion on the issue by the current government led by D.Oyun-Erdene, let us note that no action has been taken so far to hold anyone accountable at all. IAAC (Independent Authority Against Corruption) and the police detect many criminal cases and transfer them to the court but to no avail. The cases usually get stuck at the prosecution level, go back and forth or get postponed and the trials do not take place due to the absence of a relevant party after sending them abroad deliberately. They cause these deliberate delays for the dismissal of the cases, often using the statute of limitations to their advantage which proves who the real culprit is.     

The public is witnessing the collapse of justice, people becoming wealthy through any illegal way possible, judges being bought out, different applicance of law depnding on the person, and oligarchs acting above the law. While it looks as if the public seems like they are used to all this, the probability of social unrest keeps increasing. This article will elaborate on stories and facts of how public funds are misappropriated and how the criminal gets away with it.

The owner of the largest bank has fled the country.

I wrote two articles on the topic, namely “Erdenebilegism: A New Phenomenon In Mongolia’s Democracy” in 2016 and “Erdenebilegism II – Mongolia’s Next Corruption Episode” in 2019. These two articles explain how public funds were abused to enrich an individual in detail. To summarize the previous articles: At the turn of the century, making donations to the Ulaanbaatar fund or gifting apartments to city officials was enough means to obtain a land permit and construct buildings in the capital city. This was the root cause of the city’s current unorganized, unplanned buildings and traffic congestion. The Ulaanbaatar fund was created through donations, which was followed by the establishment of the Ulaanbaatar City Bank using the fund. All legal entities and institutions in the capital city were forced to transfer their tax accounts to the aforementioned bank, which exponentially increased the bank’s assets. There was an urgent need to increase its capital. D.Erdenebileg increased his shares every time the registered capital of the bank increased, and soon his ownership was at 99 percent. What’s more, he was even given the authorization to possess half of the Sukhbaatar square and the some 7-8 park plots. All previous mayors of the city from M.Enkhbold to E.Bat-Uul are his accomplices.

He purchased TDB from “Gerard Metal” for USD 70 million by temporarily placing Ulaanbaatar Bank’s money in a different account. He gained control of all sectors of the economy through his two banks. He bought media outlet (Bloomberg Mongolia), magazine (Forbes Mongolia) and newspaper company (Government news) with large sum of money and started publishing news among the public to his advantage. A number of government officials and politicians were “by his side” throughout this process. 

He sponsored politicians and spent billions on their campaign, buying out the highest level politicians starting from the president. This helped him make laws and regulations favoring his business. His infiltrated all branches of the state and most specifically the judiciary with his people.

He created his own scheme for privatization to seize “Darkhan Metallurgical Plant”, “Khutul Cement Lime Plant” using TDB. Previously, he had control over sales of “Erdenet Mining”, “Mongolrostsvetmet”. He also prepared for acquiring “Baganuur”, Thermal Plants number III and IV. (Daily newspaper, 2016.10.03). He demolished the historic building of children’s library on the peace avenue and built the glass tower of TDB for 27 billion tugriks. Before the completion of its contruction, he sold the 11th and 12th floors to the state-owned Development Bank for 27 billion tugriks. Moreover, the 10th floor was sold for 15 billion tugriks to the Mongolian Mortgage Corporation, which he owned through his bank. D.Erdenebileg is an exceptionally “talented” man specializing in raising money from state-owned institutions and selling products and services to them. Many goverments over the period turned a blind eye to all this. Besides dealing with the Mongolian government, he even made deals with the Russian government.  

After making the Mongolian government refuse its right to buy the 49% of “Erdenet”, he purchased the 49% of Mongolrostsvetmet from the Russian government. USD 400 million was raised for this purchase. He used his company “QSC” to take 30% of this money from the Ministry of Finance, Bank of Mongolia and the Development Bank. The remaining 70 percent was raised from TDB by providing loans to four companies related to him, government ministers and the mayor. The payment was transferred to Russia through the company “Mongolian Copper Corporation”, established only a few days before the election.

After seizing “Erdenet”, he paid off the loan to the TDB though several means such as buying copper for a cheap price and selling for high profit between March and August of 2016, recieving dividend of USD 120 million, adding USD 78 million from the Bank of Mongolia and getting a loan of USD 72 million from the Ministry of Finance. Of course none of this would have been possible for D.Erdenebileg to do without the involvement of then PM N.Altankhuyag, Ch.Saikhanbileg and government ministers N.Batbayar, B.Bolor and Bank of Mongolia President N.Zoljargal.

The Parliament (State Great Khural) made a decision to take Erdenet back by settling payments with the “Mongolian Copper Corporation” because the acquisition of the 49% was done through using public funds, to which the “Mongolian Copper Corporation” declined. In this particular session of the parliament, the then president Ts.Elbegdorj was defending the privatization by claiming that Erdenet was no longer a lucrative cash cow. It has already been 8 years since Mongolian courts delayed the prosecution of this fraudulent activity.

Turning the clock from Singapore 

Currently, D.Erdenebileg is residing comfortably in Singapore. In February 2023, D.Erdenebileg, was who was detained for investigation, was allowed to travel to Singapore for treatment by paying a bail of 3 billion tugriks to a certain Sukhbaatar district judge. The treatment trip of 14 days has now turned into 10 months and nobody has done anything to bring him back. The bail has probably become the government’s income. But that amount is nothing to him. In spite of being wanted by Interpol, he has apparently hired lawyers and is requesting further clarification from the government. Principally, it is possible to repartiate him using the UN convention against corruption. 

He transferred tens of millions of dollars from Mongolia to his company Boroo Pte (Boroomc.com.sg), registered in Singapore, and bought a gold mine in Peru from Barrick Gold company in 2021, and changed the name to “Minera Boroo Misquichilca SA”. From quick glance at the company’s website, its management is made up of Mongolian people such as Dulguun Erdenebaatar as president and CEO, Altan-Ochir Erdenechuluun as vice president, along with several foreigners. The chairman of the board is not mentioned, but it is clear that D.Erdenebileg himself sits in that position as the owner. This mine is projected to produce 175,000 ounces or 5 tons of gold in 2023, which is valued at USD 330 million at the current price. After deducting expenses from this, D.Erdenebileg will earn about USD 200 million or 680 billion tugriks.

He has no other choice but to spend this money on 2024 elections campaign of parties and candidates who will pardon him and buying votes for them. Many other Erdenebilegs (with cases such as Erdenet 49% percent, green bus, SME fund, coal theft, “birds-criminals fleeing abroad”) are postponing their trials and counting days until the 2024 elections to rig it and cover up their crimes.

The 2024 elections might see the historically major political deals. For example, the Democratic Party’s building to the east of Sukhbaatar Square was bought and demolished by D.Erdenebileg. Would the DP reject a brand new palace and full sponsorship for the election campaign if the offer is made? If the DP wins the elections, would they perhaps give him the 49% of Erdenet again? As for the MPP, there is a whole faction waiting for the right turn of events, and we do not know what deals they might have up their sleeves.

This is how the Erdenebilegs are plotting a takeover of the upcoming election and furthermore the state. The main issue here is not only Erdenebileg, but rather the financing of Mongolian parties and the systemic structure that are serving as the grounds on which oligarchs are born and strengthened.

However, I do hope that the criminal gangs of political and financial oligarchs do not have enough power to buy off the conscience, freedom, and faith of the Mongolian people. We are not the people to lose our invaluable liberty and motherland gained through centuries of struggle to the game of a few mere fraudsters.

Trans. by Munkh-Erdene Davaajav

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