A Mongolian businessman has accused Boris Johnson’s half-brother of filing a false fraud charge against him for disrupting control of a mining project.
Max Johnson, the youngest son of the British Prime Minister’s father Stanley, is seeking to recoup a $ 19 million investment in the Zasag Chandmani mines on behalf of Simon Glray, the former chairman of Glencore.
Following Johnson’s allegations, Mongolian police investigated ZCM’s owner, Buyantogtokh Dashdeleg, on suspicion of embezzlement and money laundering and sent a report to the prosecutor general.
Buyantogtokh, who is seeking asylum in the US, vehemently denies the allegations and in his first public comment on the matter, Johnson said Johnson had put “great pressure” on the Mongolian government to start criminal proceedings. Although a trial has been ordered, a case has yet to be called in court.
“I can not afford to keep quiet,” Buyantogtokh told the Financial Times. “The Mongolian government is trying very hard to attract foreign investment. . . and it is extremely challenging for them to return against someone like Max Johnson. ”
The dispute between Johnson and Buyantogtokh comes on a sensitive time for Mongolia, which needs more foreign capital to develop its natural resources, but has been embroiled in a bitter row with Rio Tinto over a late-running $ 6.8 billion underground copper project.
Buyantogtokh insisted he could prove that the money invested by Murray’s investment vehicle GRF Paragon was properly spent. “There are videos of the construction progress that I can share with anyone interested to verify,” he said, adding that if the evidence against him was so overwhelming, “one would reasonably ask why this case is still pending two years later. is the corridor? “
“This case is 100 percent a civil matter and I have tried on many occasions to resolve it with Max. “I have never said that I do not owe GRF money and I have tried many times to reach a friendly settlement with Max,” he said. Buyantogtokh fears he could be stripped of the project if convicted of fraud.
A former child actor, Johnson was educated at Eton and Oxford universities, where he studied Russian. He first visited Mongolia in 2006 during the Naadam Festival of Traditional Sports. He “fell in love with the country” and made a promise “to find some career choices that would bring me back here,” Johnson told Eagle News during a visit to Mongolia in September.
“When Murray invested in Mongolia in 2016, I was naturally aware of it,” says Johnson, who knew Murray from his days as a metal dealer in Hong Kong. “He asked me in 2018 to join the project, which I did.”
Murray’s private investment group GEMS founded GRF in 2015 to invest in ZCM, owner of a high-grade copper, gold and iron project.
Between 2016 and 2018, the fund invested $ 19 million in ZCM in exchange for convertible loan notes – its only asset – which it was eventually able to exchange for a stake in the company.
Six months after the final portion was transferred in cash, Johnson joined the project.
In Johnson’s telling of the story, it became clear to him that the $ 19 million that GRF had invested was not spent on the development of the mine. In 2019, he reported his concerns to the Mongolian police, who launched an investigation, after which work on the mine was stopped.
“We would very much like the case to be heard in court,” Johnson told Eagle News. “Of course we will respect the decision of the Mongolian legal system – it is an independent, impartial authority.”
Buyantogtokh says these allegations are false. Independent analysis of ZCM’s financial statements between 2015 and 2018, prepared by accountants BDO and seen by the FT, found that “no evidence evidence of cases of abuse of power and embezzlement and / or misappropriation of funds” by Buyantogtokh.
According to Buyantogtokh, a GRF team was actively involved in the project. “Not once have they raised an issue,” he said. “They visited the mining site every few months, visited Mongolia monthly for council meetings and received detailed monthly financial and operational reports from a team of expatriates working on this project.”
He added that Johnson only took legal action after Buyantogtokh senior secured debt in ZCM from Noble Group, the commodity trader, in 2018.
“This put GRF in a very weak position as their debt was secured second position. I believe, faced with this reality, Max decided to continue criminal proceedings, as he had little civil legal assistance. “
Johnson said: “We are unable to comment at this stage due to the ongoing legal process, but as soon as we can, we would like to do so.”
However, he told the Sunday Times in September that he was facing a personal loss of £ 1.5 million in Mongolia and was “acutely aware” of the risks of any Johnson-name deal.
Murray did not respond to requests for comment.
Asked why he left Mongolia in 2019, Buyantogtokh said it was for a medical procedure. He decided not to return after learning that the authorities were investigating his wife, he added.
“Faced with powerful opponents, I felt my only chance to resolve this whole issue fairly was to go to the US and take my family with me,” he said.