N.Zoljargal, former Governor of Mongol Bank from 2012 to 2016, was arrested on the night of November 29 by the Independent Authority Against Corruption (IAAC) in connection to several cases involving the misuse of public funds and alleged embezzlement. The Chingeltei District Criminal Court imposed a travel ban on N.Zoljargal and ruled that it was unnecessary to keep him in custody.

The prosecutor’s office has not officially charged N.Zoljargal with a crime and therefore the Chingeltei District ruled to release him. An investigation into not only the former Mongol Bank Governor but the whole administration of the central bank between 2012 and 2016 is being conducted by IAAC.

In August 2017, anonymous sources at the General Police Department and IAAC told media that N.Zoljargal is being investigated as part of the probe into his administration’s alleged violations including embezzlement and misappropriation of funds.

This came after a parliamentary probe in May 2017 which found an excess of three million MNT in financial violations.

Mongol Bank’s operational deficit was investigated as part of the probe. In the past four years, the bank’s deficit had doubled every year. In 2016, the bank reported a deficit of 962 billion MNT. The working group investigated the reasons for the deficit as it puts pressure on the state budget.

N.Zoljargal is being investigated specifically in regards to the Price Stabilization Project and spending related to the Chinggis Bond. In particular, the projects and the results of the Price Stabilization Project have been brought into question. The former administration of Mongol Bank has also been accused of mismanagement of the Chinggis and Samurai bonds, having provided what some suspect to be “illegal” loans.

MP T.Ayursaikhan is on record saying that N.Zoljargal spent 3.7 trillion MNT for the mortgage program and 1.9 trillion MNT for the Price Stabilization Project without consultation.

The government said it is in the process of correcting much of what has been done by the central bank between 2012 and 2016. As part of the IMF extended fund facility, the central bank is undergoing major reform to increase its independence from politics and improve its governance.

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