The trial of a tax investigation case into SouthGobi Resources Ltd. (SGQ) and three of its former employees is set to begin in Mongolia next week.
The Court of Justice in Mongolia is set to hear the case on June 30, SouthGobi said yesterday in a statement. The former employees are U.S. citizen Justin Kapla and two Philippine nationals, Hilarion Cajucom Jr and Cristobal David, SouthGobi Chief Executive Officer Ross Tromans said today by phone from Ulaanbaatar. The three all denied the charges against them and confirmed they have been informed of the trial date when contacted today.
SouthGobi, controlled by Rio Tinto Group unit Turquoise Hill Resources Ltd. (TRQ), said on May 13 that charges for alleged violation of Mongolia’s tax laws had been officially filed against three former employees and its local unit SouthGobi Sands LLC. The trial date was set after an additional investigation on the case was completed, the company said yesterday.
The trial date is the latest step in an investigation that started in 2012 with the three former employees kept in Mongolia under a travel ban since then. The case has put a spotlight on the country’s legal system, which allows authorities to prevent suspects and witnesses from traveling outside the country.
“SouthGobi disputes these accusations and the procedures and conclusions of the investigations that led to these accusations and will vigorously defend itself and its former three employees against these charges,” it said.
The company and its unit prepared its financial statements in compliance with International Financial Reporting Standards, and lodged all tax returns as required under Mongolian tax law, it said.
“I have been notified of a hearing,” Kapla said today by e-mail. “There is potential for the trial to start but it is not 100 percent confirmed the trial will start Monday as we have a motion to dismiss that needs to be considered first.”
SouthGobi is 56 percent owned by Turquoise Hill.
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