Following the Cabinet’s decision to purchase 30 percent of the public shares of Erdenes Tavan Tolgoi (Erdenes TT) distributed to Mongolian citizens, the Mongolian Association of Securities Dealers (MASD) announced that they oppose the Cabinet’s decision.
The MASD said that the company’s shares should be traded through stock brokerages and dealers according to the law, and noted that trading the Erdenes TT shares through commercial banks is illegal.
It has been speculated that the Cabinet plans to raise 1.65 trillion MNT in government bonds to buy the Erdenes TT shares from the public. The MASD stressed that the government is violating the laws and regulations of the stock market, and that they are conducting the purchase program to support commercial banks.
The MASD underlined that when a company wants to release shares on the stock market it has to do so through an authorized brokerage or dealer in accordance with the Law on the Stock Market. They said that over 700,000 people holding Erdenes TT shares have opened accounts with brokerage firms and stock dealers so far.
Director of the Board of MASD B.Ulziibayar said, “The stock market has its own laws and regulations, and the government doesn’t support the stock market. We ask that the government not make a mess at the stock market for political purposes.”
The MASD believes that the Cabinet should make the legal status of Erdenes Tavan Tolgoi LLC definite and register the company with the Financial Regulatory Commission. The MASD also believes that the government doesn’t have the right to purchase the public shares exclusively, and that citizens should have the right to self-manage their shares.
News.mn reported that as of June 13, a total of 185,000 citizens have submitted requests to commercial banks to sell their public shares to the government