Mongolia pardons three jailed foreign businessmen

Mongolia's president on Thursday pardoned one US and two Filipino former mining executives jailed for tax evasion in a case that had damaged the resource-rich nation's reputation among overseas investors. The decree pardoning the trio was announced in a statement on President Tsakhiagiin Elbegdorj's website, saying he made the decision in accordance with his "constitutional rights".
Elbegdorj, who is trying to encourage overseas investment in the vital but troubled mining sector, called his decision "difficult" in a tweet, adding that he did it out of his "love" for Mongolia. US citizen Justin Kapla and Filipinos Hilarion Cajucom and Cristobal David were each sentenced to more than five years late last month and incarcerated in a maximum-security prison.
The charges stemmed from a 2011 tax dispute with their former employer, coal miner SouthGobi Sands, that dragged on for years before the three were indicted in 2014. The firm's parent company SouthGobi Resources is listed in Toronto and Hong Kong. It was formerly controlled by one of British-Australian mining giant Rio Tinto's subsidiaries, which has announced the sale of its shares to a Chinese firm.
Sprawling and sparsely-populated Mongolia enjoyed world-leading economic growth in recent years - peaking at 17.5 percent in 2011 - on the back of a minerals boom exemplified by the giant copper and gold Oyu Tolgoi mine, operated by Rio Tinto. But that expansion has slumped to troubling levels, as rising resource nationalism, a global resources bust and an increasingly stringent investment environment led many foreign firms to abandon the country, and the three foreigners' jailing sent a chill through potential investors.
Foreign direct investment into Mongolia dropped 74 percent last year. The US embassy in Ulan Bator welcomed the pardon. "We appreciate President Elbegdorj's action," it said in a statement, adding that it had confirmed Kapla had been released and a ban on him leaving the country had been lifted. But it warned that the case had damaged Mongolia's reputation among investors. "The business community has made clear to us that this case negatively affects its assessment of Mongolia as a destination for foreign direct investment," it said.