SouthGobi Resources, the owner and operator of the Ovoot Tolgoi coal mine, reported on November 16 that the company’s CEO and chairman Aminbuhe had been arrested in China on October 11, 2017. As a result of the arrest, the Hong Kong listed company has seen a 13.6 percent decrease of its share value.
Aminbuhe was arrested in Shandong province and is being held at Rizhao City Detention Center in China as a suspect in a fraudulent loan case.
The board of directors of SouthGobi Resources said in a filing to the Hong Kong Stock Exchange that the company had formed a special committee to initiate a formal internal investigation into the charges against Aminbuhe and the connection between those charges and the company.
SouthGobi had announced on November 13 that Aminbuhe was on leave from the company and that Bing Wang would be the acting interim CEO.
“During this interim period, the company will continue to carry on its business in the normal course, relying on the depth and experience of its management team and the board,” the filing said.
SouthGobi closed 5.2 percent lower at 1.46 HKD on November 20. The company’s stock was at its highest at 127.8 HKD in March 2010 after its initial listing.
SouthGobi is dual-listed on the Toronto and Hong Kong stock exchanges, owns and operates its flagship Ovoot Tolgoi coal mine in Umnugovi Province, Mongolia. It also holds mining licenses in other metallurgical and thermal coal deposits in South Gobi Region of Mongolia. SouthGobi produces and sells coal to customers in China.
Aminbuhe joined SouthGobi as non-executive director in August 2015 and became the CEO in September 2015. Before joining SouthGobi, Aminbuhe was a director at National United Resources Holding Ltd. of China.