Mongolia convicts three former SouthGobi employees of tax evasion; sentenced to five years in prison

Three former employees of SouthGobi Resources (TSX: SGQ) including a U.S. citizen will be spending the next five years behind bars after a Mongolian court found them guilty of tax evasion.

A panel of appointed judges from the Second District Criminal Court of Justice sentenced American Justin Kapla and two Philippine nationals, Hilarion Cajucom, Jr. and Cristobal David, to prison sentences ranging from five years and six months to five years and ten months. The court also fined SouthGobi US$18 million as a "civil defendant" in the case.

The decision – reached after a three-day trial that ended on Jan. 30 – is certain to make mining executives think long and hard about whether to invest in future mining projects in the country. The three employees have been detained and prevented from leaving the country since October 2012.

SouthGobi, which was not a party to the criminal proceedings and was not allowed to call witnesses in its own defense, says it has not committed tax evasion and is waiting for written reasons for the judgment. In the meantime, president and chief executive Enkh-Amgalan Sengee called the conclusions "erroneous," …

Read the complete article at NorthernMiner.com/news/mongolia