Mongolia: Golomt battles to restore its reputation
It was the poster bank for a new Mongolia full of opportunity. But Golomt Bank’s reputation has mined unexpected depths over allegations of hidden defaults, lawsuits with leading financial institutions and a sudden parting of the ways with a globally respected CEO. Now a new group of executives is launching a fightback.
Bolormaa Luvsandorj almost skips as she enters the Coffee Bean café in Ulaanbaatar’s Bodi Tower. "Hello," she says, sitting down with a big impish grin on her face and ordering a full-fat latte, two extra shots. "How can I help?"
Goodness knows where she gets her high-spiritedness from. Luvsandorj is after all the newly minted executive vice-president and chief investment officer of Golomt Bank, having joined Mongolia’s third-largest lender in January. So far, it has been a baptism of fire. In the first weeks of the year, the bank was pilloried in the global press, with leading newswires lining up to hurl dirt in the face of a lender that was considered a leader in Mongolia’s tiny but fast-growing banking sector.
Particularly damaging was a long exposé published on February 5 by Bloomberg, which accused Golomt of destroying financial records, declining to sign off on financial audits, and wilfully deleting thousands of allegedly incriminating files.
The accusations of financial malfeasance contained in the report embraced a dizzying array of leading global corporates and financial institutions. There were the $65 million-worth of letters of credit (LCs) issued by Golomt in 2007 and 2008, which guaranteed payments for third-party transactions to Itochu, a Japanese conglomerate.