One man's plight in Mongolia is having a "chilling effect" on foreign capital inflow, according to his advocates, which comes in stark contrast to the warm and welcoming message the young and emerging democracy is trying to send to international investors. 
A citizen of both Australia and the UK, Mohammed Munshi has been detained by authorities in the landlocked country for more than a decade due to issues relating to his dealings as chairman of Gobi Coal and Energy Limited. 
Munshi was accused of defrauding investors by raising large sums of money for Mongolian mineral projects under false pretenses.
He is accused of failing to deliver on promises to list shares of the license-holding company on stock exchanges, with prosecutors arguing that he instead funneled funds into offshore accounts, failing to develop the mineral deposits.
During the decade-plus detainment, Munshi served a seven-year prison term, which ended mid-last year.
However, his court-imposed travel ban remains in place and is reportedly to remain so unless he pays his former Mongolian business partner almost 32 billion tugriks, or US$14.5 million. 
His advocates cite alleged mishandling by the Mongolian authorities from early on in the ordeal. 
One such advocate, Heretic Law partner Alison Battisson has been drumming up support for the sexagenarian and applying pressure on the Australian and British governments to intervene. 
Within the past three months, she has been interviewed by national Australian news outlets, The Australian, ABC, and SBS. 
She has also helped to prepare recent complaints regarding the situation to the UN Human Rights Council and UN Special Rapporteurs on Torture, Health, and Older Persons. 
A decade being ‘tortured, beaten, starved'
"Mr Munshi has spent the last decade being tortured, beaten, starved, religiously abused, living in disgusting conditions with open flowing toilets and at times completely cut off from the world," Battison was quoted as saying by The Australian in an article published on March 23. 
A spokesperson for Australia's Department of Foreign Affairs and Trade (DFAT) told Mining Journal that it is providing consular assistance to Munshi, including advocating to Mongolian authorities for the lifting of his travel ban on humanitarian grounds. 
"We also convey our expectations that Australians are entitled to due process, humane and fair treatment and access to their legal team.
"Owing to our privacy obligations we are unable to provide further comment," the spokesperson said. 
‘The Mo Munshi case is having a chilling effect on investment'
Battisson and fellow advocates have been keen to link Munshi's plight to inbound foreign investment in Mongolia, which is crucial to the resources-rich country's plans to double its heavily mining-dependent GDP by the end of the decade. 
Another Munshi advocate, former member of the UK Parliament and chair of the Mongolian-British Chamber of Commerce, John Grogan, told The Australian that the case could be "extremely damaging" to perceptions about Mongolia. 
"I am a big supporter of Mongolia and have visited the country 51 times but I have to tell my many friends there that the Mo Munshi case is having a chilling effect on investment and trade," he said. 
Battison said Munshi's treatment by the Mongolian judiciary and government "should serve as a warning to foreign investors in Mongolia". 
DFAT did not reply when asked whether the situation has negatively affected trade relations between the two countries. 
Mongolia's Ministry of Justice and Internal Affairs was not available for comment. 
‘Under threat of kidnap, his family fled'
On March 4, former Gobi Coal geologist, Mike Pole, recalled the events of the past decade in his blog, which has gained some press attention.
The complaint filed to the UN reportedly said the underlying accusation against Munshi was that he made statements to Chuluunbaatar Baz about how well GCE would perform and that he had suffered $25.5 million in losses as a result. 
Mining Journal attempted to contact Baz via Monnis Group, of which he is chief executive and president. There was no response. 
Pole's recollection is: "The case involved Gobi Coal and Energy making collateralised loans to a Mongolian company, owned by the Plaintiff's brother, who defaulted and was then taken, in 2015/2016, to the HKIAC Court in Hong Kong by GCE—who won the case. 
"The Plaintiff was an investor and shareholder in GCE Limited. Munshi was originally invited back to Mongolia in 2015 to discuss the issue and others, but was then detained. 
"He was then told, during the investigation period, by the police and prosecutors, that he would be permitted to leave Mongolia only if he paid the Plaintiff/CEO of the Mongolia investors company several million dollars, and waived his brother's collateralised loan and/or transferred to him the assets of Gobi Coal and Energy in Mongolia," he said.
Pole accused the Mongolian authorities of "a clear attempt to intimidate" by using an earlier version of the law "which had a more draconian sentence" before the Supreme Court reduced the sentence to seven years using the new law. 
"Under threat of kidnap, his family fled China to Australia," he added. Details of the allegation were reportedly included in the complaint to the UN. 
The UN complaint reportedly details Munshi's time in the maximum-security prison, including allegations of a lack of communication and medical treatment, as well as physical and verbal abuse and inhumane living conditions.
The Australian quotes the UN complaint to say, "Mr Munshi was told, multiple times throughout the course of his imprisonment, that he would be released and allowed to leave Mongolia if he paid off Chuluunbaatar Baz". 
Companies doing business in Mongolia
Australian-British Rio Tinto is serving as something of a test case given the scale of its operation at the Oyu Tolgoi copper mine in the South Gobi region.  
In December, Rio's chief executive for copper Katie Jackson told shareholders that Mongolia is "very much at the heart" of the mining giant's growth strategy. 
The relationship between the company and the country, however, has not been without its issues. 
Along with a lingering tax dispute, contractors, including Australians, Americans, and Canadians, working on the Oyu Tolgoi mine had their passports confiscated before being told to leave the country during a tense stand-off with the Mongolian government over a visa row. 
"When I visited Mongolia in October, I was really impressed by the high level of national participation. Our workforce is now 97% Mongolian, a crucial indicator of our focus on growing OT's social licence," Jackson said. 
"This is particularly important as we continue to focus with our government partners on resolving legacy shareholder issues," she said. 
She explained some of the issues as being "frictions around applications of investment frameworks and detailed applications of tax", which can cause "a little bit of grit in the relationship". 
"We need to work on that alignment and that future vision," she said. 
When questioned by Mining Journal whether Munshi's situation had factored into any of the company's decision-making or if it was aware of investment being affected, Rio was not available for comment. 
By Nathan Richardson

Published Date:2025-04-03