Two U.S. senators have asked Mongolia to allow U.S. businessman Justin Kapla, who is a witness in a corruption investigation, to exit the country.
Minnesota senators Amy Klobuchar and Al Franken requested Mongolia allow Kapla to return to the U.S. on “humanitarian” grounds to spend time with his ailing stepfather, according to copies of the letters that Kapla sent to Bloomberg News. The letters were confirmed by Erik Wadkins, a press assistant in Klobuchar’s office in Washington, D.C., and Michael Dale-Stein, deputy press secretary in Franken’s Washington, D.C. office.
Kapla has been blocked from leaving Mongolia since October 2012 when investigators designated him a witness in a criminal case against D. Batkhuyag, the former chairman of Mongolia’s Mineral Resource Authority. At the time, Kapla was president of SouthGobi Sands, a coal miner whose Hong Kong-listed parent SouthGobi Resources Ltd. is majority owned by Rio Tinto Group.
Batkhuyag was jailed last February for six 1/2 years for illegally issuing more than 100 mining licenses, according to Mongolian news agency news.mn. His sentence was later reduced to four years, the outlet reported. The anti-corruption agency’s probe found he had reissued four suspended SouthGobi permits and transfered another license to a company run by associates, according to News.mn and UB Post newspaper reports.
Kapla, no longer employed by SouthGobi Sands, was later accused of money laundering and tax evasion by Mongolia’s anti-corruption authority, although no charges were formally made, he said in an e-mail on Jan 28. Shirchin Sukhbaatar, the director of the consular department of the Ministry of Foreign Affairs, was not immediately available to comment when contacted by Bloomberg News today. Both letters were addressed to Sukhbaatar.
A native of Elk River, Minnesota, Kapla met with authorities on Jan. 29 to review the government’s audit of SouthGobi’s accounts. He received a seven-page summary of the audit, which showed ongoing differences between the two sides, he said. SouthGobi Resources has received the forensics expert report from the investigator and is reviewing it, said Bertrand Troiano, SouthGobi’s chief financial officer, who is based in Hong Kong.
“The ban is still in effect - that is the only leverage they have on SouthGobi,” Kapla said on Jan. 30 in an interview by phone from Ulaanbaatar. “Everyone thought that it was going to change and we were all very disappointed in this latest result.”
Mongolia imposes travel bans on foreigners designated a witness or suspect in a criminal case. Australian lawyer Sarah Armstrong was held for two months in late 2012 in connection with the SouthGobi case.
Two former colleagues at SouthGobi, Hilarium Cajucom and Cristobal David, both Philippine nationals, have also been banned from exiting the country in connection with the investigation.
SouthGobi Resources is also listed in Toronto.