Mongolia sentences Canadian miner's executives to jail for tax evasion

Three ex-employees from Canadian miner SouthGobi Resources Ltd. were found guilty of tax evasion by a Mongolian court on Friday after three days of court trial which wrapped up a three-year high-profile investigation.

U.S. national Justin Kapla, who was the president and executive director of a subsidiary company of SouthGobi Resources, was sentence to a prison term of five years and 10 months, according to court spokeswoman Enkhbayar Jamsranjav.

While Hilarion Cajucom Jr. and Cristobal David, the two Philippine nationals who worked under Kapla in the company, also received jail terms of between five and six years. The company was fined 35 billion Mongolian tugriks (around 18 million U.S. dollars), she said.

SouthGobi is controlled by Rio Tinto Group, one of the largest mining corporations in the world, and operates some of Mongolian largest coal mines in the South Gobi Region.

The case has coincided with Mongolia's conflict with Rio Tinto which is withholding its investment of 4 billion dollars in the landlocked country's copper and gold mines.

According to Mongolian laws, the defendants have two weeks to appeal their cases to a higher court.

Analysts believe that the three foreign executives may be pardoned because the Mongolian government, which is struggling with the sluggish economy, does not wish to scare foreign investors away. Endi