Western media have been spreading biased and unproven stories about the failure of one of Mongolia's largest commercial bank's to honour its letter of credit (L/C) obligations, according to its executive director, Ganbold Galsan.

The Golomt Bank head told local media he was "surprised" that news agencies such as Reuters and Bloomberg covered stories that he claims are "based on biased, one-sided and unproven materials."

L/C obligations

The reports concern the bank's dealings with foreign counterparties and say that Golomt Bank was sued in 2012 by Japan's Itochu Corp for not paying L/Cs worth US$43 million.

Reuters and Bloomberg also maintain that the Mongolian bank had breached a loan contract and had been asked to return loan funds by Credit Suisse Group of Switzerland.

Convertible loan

The reports also said Golomt Bank had breached an agreement with Stanhope Investment.

It is owned by Abu Dhabi Investment Council, which since 2007 had extended a US$35 million convertible loan to the Mongolian bank.

Denials

Ganbold maintains that the news agency reports fail to mention that the issues related to the Itochu L/C deal and the Credit Suisse transaction had been fully settled.

The bank chief said the Stanhope Investment dispute was a matter of "different understandings" about the implementation of the contract between the two parties.

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