BEIJING (Reuters) - Resource-rich Mongolia on Friday jailed an American and two Filipinos for more than five years after finding them guilty of tax evasion, ending a three-year case that deterred investors.
Perceived resource nationalism in Mongolia, fed by suspicion at foreigners taking control of some of the world’s largest coal and copper deposits, has led to an annual decline of 71 percent in foreign investment in the year to November 2014.
Prosecutors said a panel of judges levied a fine of $35 billion tugrik ($18 million) on Toronto-listed SouthGobi Resources Ltd., besides the prison terms for the men, former employees of the firm.
The “verdict was guilty,” the general prosecutor’s office said in a brief statement.
The three men were U.S. citizen Justin Kapla, and Philippine citizens Hilarion Cajucom Jr and Cristobal David.
U.S. Ambassador Piper Campbell and some embassy staff attended the trial, where they noted “several interpretation problems”, the U.S. embassy in Mongolia said in a statement.
“Because of these problems, the defendants stated during the trial that they could not understand the interpretation, nor could they express themselves clearly,” the embassy added.
The Philippines embassy could not be reached for immediate comment.
Earlier, judges had twice returned the case to prosecutors, citing insufficient evidence.
Travel bans during the investigations have kept the convicted men in Mongolia since May 2012. Kapla registered a case with the U.N. Human Rights Committee after being unable to leave for more than two years.
The case began after Mongolian authorities raided the offices of SouthGobi Resources’ mining unit, SouthGobi Sands, in May 2012. SouthGobi mines the Ovoot Tolgoi coal deposit in the Gobi desert, 40 km (25 miles) from the Chinese border.
The raid followed SouthGobi Resources’ acceptance of an offer from Aluminum Corp. of China Ltd. to buy a majority stake.
The deal sparked controversy over the prospect of a Chinese state-owned company taking control of the mine. Mongolia adopted new laws that year to curb foreign investment, effectively blocking the deal.
Mongolia has historically been hesitant to hand strategic assets to China after centuries of feuding between the neighbors.
Editing by Clarence Fernandez