SouthGobi Sands avoids taxes of 35 billion Togrog

Ulaanbaatar /MONTSAME/ The State General Prosecutor’s Office (SGPO) called a press conference on Friday to inform the public about the tax avoidance cases regarding “SouthGobi Sands” LLC, a branch of Canadian-listed SouthGobi Resources Ltd. in Mongolia. The news conference was called by Mr T.Sukhbaatar, head of the SGPO’s Press and Public Relations Division; and Ms G.Gereltuya, an attorney of the Municipal Prosecutors’ Office. A case was opened by the Corruption Combating Agency (CCA) in 2012 regarding the group of officials led by D.Batkhuyag, then-head of the Authority for Mineral Resources. During the investigation, an investigator and commissioner O.Barkhasbadi separated a criminal case involving a US citizen Justin Kapla, who was the president of SouthGobi Sands at that time. He has since been under investigation on the grounds of tax evasion with a value of MNT 17 billion 441 million 383 thousand and 600 payable for MNT 90 billion income of the company, by intentionally presenting added value of taxable income expenditure, thus reflecting an omitted value of taxable revenue into the 2011 financial report of the company, with assistance from a former colleague at SouthGobi, a Phillipine national Hilarium Cajucom, the general manager at that time. Another investigation has taken place regarding a separate tax evasion of MNT 17 billion committed by Hilarium Cojacum and Cristobal David, who then worked as a manager in charge of finance and accounting of SouthGobi, both Philippine nationals. A group of criminal experts issued a conclusion on December 16, 2014, that confirmed the validity of these cases of significant amount of tax evasions, which imposed tax deficit of over 35 billion Togrog. The cases have been passed to the primary court. Travel bans for the accused persons have been issued during the investigation, and the SouthGobi accounts in Khan Bank, Golomt Bank and Trade Development Bank have been sealed, said T.Sukhbaatar. The case has been the biggest ever taxation avoidance crime in Mongolia in terms of amount of money.