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Key anti-ruling party leader arrested - april 13, 2012

Ex-President of Mongolia, Chairman of Mongolian People’s Revolutionary Party (new MPRP), key anti-ruling party leader N. Enkhbayar has been arrested by law enforcement officers led by Anti-Corruption Agency  and  transferred into custody in highly sensational circumstances, an event that is resonating throughout Mongolian society.

DETAILS

  • According to news.mn on April 13, 2012, Police media spokesman has stated that Anti-Corruption Agency has sent into General Police Agency resolution to have Mr. N. Enkhbayar come for investigation by force due to him not coming  despite repeated efforts. According to this resolution, about 300 police officers participated in arresting Mr. N. Enkhbayar this morning. While doing so,  Mr. N.Enkhbayar was introduced a resolution however he resisted and therefore he was arrested.
  • According to NTV on April 13, 2012, Chief Investigator of Anti-Corruption Agency has stated that they implemented decision to arrest and place in custody  Mr. N. Enkhbayar according to court decision. Investigation has been continuing of over a year. He has not come for investigation since considered a suspect. Therefore, a decision has been made to arrest and place in custody. The agency is investigating Mr.Enkhbayar on number of misdealings including issues of publisher paying half of transportation and customs expenses for his book, issue of misdealing of TV equipment donated by Japanese Buddhists, issue of Remif company allegedly related to his son E.Batshugar and other misdealings.
  • According to news.mn, MPRP has called for protest demonstration on Sukhbaatar square  and stated it will organize nationwide protest activities and if the Chairman is not released within 24 hours will proceed to next form of political fight. MPRP has informed that Chairman Enkhbayar will proceed to hungerstrike.
  • According to news.mn, up to 11 ruling party(Mongolian People Party,MPP) MP-s including B.Bat-Erdene, O.Chuluunbat, Ch.Ulaan, Ts. Davaasuren, D.Terbishdagva, Ts. Batbayar, R.Rash, B.Tsengel , D.Baldan-Ochir and Kh.Badamsuren who were together with Chairman N.Enkhbayar throughout his arrest are rumored to contemplate of resignation from MPP membership.
  • According to news.mn, MPP Caucus leader has made following statement after discussion of the event by the MPP Caucus and Steering Committee.  “  Related officials informed that these actions are proceeding according to the law. We regret politicization by some political forces. Some accuse of MPP participating in this. We stress that the Anti-Corruptions Agency, Prosecutors and Courts and their decisions are independent from Parliament, Government and political parties. Politicization of this event  and creating public frustration can potentially bring grave  consequences.  There are no issues of resigning from the party and no official issues regarding raised at this point.”

IMPACT AND CONCLUSION

In short term, we view this highly sensitive for Mongolia event  as negative for Mongolian valuations to certain degree in terms of increasing political risk premium for Mongolia due to intensification of political confrontation, sensitive trend considering shortly approaching Parliament elections in June 2012 . Parliament elections in 2008 were scarred by public riots that cost five human lives and otherwise substantially damaged social harmony.  However, the event is already sending strong message of anti-corruption regulatory enforcement and, further, in case of conviction of Mr N. Enkhbayar on corruption charges, it will indicate even stronger anti-corruption regulatory enforcement and rule of law which would be positive influence for Mongolia and investors. Furthermore, we believe that the authorities will be able to monitor the situation and will not it escalate out of control.