Gobi’s Privatization on Hold

Leading textile producer Gobi JSC’s plan to become a private (closed) company has been temporarily halted by the Financial Regulatory Commission (FRC) following an inspection.

According to the FRC, the company engaged in a conflict-of-interest transaction in 2019 when purchasing shares of its competitor, Goyo LLC, for 161 billion MNT. This transaction led to six consecutive years of losses, preventing dividend payouts and harming the interests of more than 25,000 small shareholders.

The FRC also found that out of 228.3 billion MNT in loans taken since 2019, only 31% (72.7 billion MNT) was used for its intended purpose, with the rest unaccounted for.

The suspension will remain in effect until the rights of minority shareholders, who collectively own 10.3% of the company, are safeguarded.