Mongolian court jails Australian mine executive for 11 years

The family of an Australian mining executive sentenced to 11 years jail in Mongolia fear he will die in prison.

Australian mining executive Mohammed Munshi behind bars in Mongolia.

An Australian mining executive whose company received money from an 1MDB subsidiary in Malaysia has seen a conflict with a prominent Mongolian family result in an 11-year jail sentence.

Former Perth man Mohammed Munshi, 57, was jailed in Mongolia in July after being accused of defrauding Monnis International, which was among the investors in his Gobi Coal and Energy company.

Monnis International — led by Baz Chuluunbaatar, a member of Mongolia’s prominent Baz family — claimed to have been tricked by Mr Munshi into becoming one of about 180 investors in Gobi Coal, because plans to take the company public had not eventuated.

But the plan to list the company had been put off after coal prices plummeted in 2012, with Gobi Coal putting its Shinejinst and Zeegt projects in Mongolia’s southwest on care and maintenance programs until the market improved.

Seven months ago, the company said prices had improved and that it was again “moving forward with a public listing”.

But in 2015 — in what one mining industry source described as an act of a “disgruntled investor” at a time when other shareholders were willing to ride out the trough in prices — a complaint was made to the Mongolian police, resulting in Mr Munshi being banned from leaving the country despite health issues. The matter appeared to escalate last year, after the Hong Kong International Arbitration Centre ordered the Baz family to pay Gobi Coal $US11.5m over defaulted loans.

Within weeks of the March 2016 decision, stories appeared in nationalist sections of the Mongolian press accusing Mr Munshi of being a fraudster and describing Monnis International as a “victim”.

After a two-day trial in July, he was jailed for 11 years and reportedly ordered to pay Monnis International $15.8m. He has lodged an appeal, which is expected to be heard in the coming month or two.

Sebastian Hempel, a fellow Australian who has taken over as chairman at Gobi Coal, said the company was supportive of Mr Munshi’s appeal against his jailing. “The company is supportive of Mo and his efforts to clear his name,” Mr Hempel said yesterday.

Daughter Minah Munshi told Perth’s Sunday Times that “I have grave concerns that he won’t ever see my children again because he won’t survive”.