An associate of former Mongolian president Nambar Enkhbayar who was jailed along with him for corruption earlier this month may have funnelled government funds at the centre of the court case through two Hong Kong companies. The associate, Jambal Myagmarjargal, is the sole director of the two companies. Mongolia's anti-corruption force alleges that Enkhbayar ordered Edernet, a prominent Mongolian state copper manufacturer, to enter into purchase contracts in 2005 and 2006 with Myagmarjargal. Mongolian investigators believe Myagmarjargal, a driver and a relative of Enkhbayar's wife, had no means to supply steel as demanded by the contracts. A statement from the Mongolian Independent Authority Against Corruption said the contracts pushed through the Erdenet factory involved US$3.5 million in state funds - some of which investigators believe may have been moved through the accounts of the Hong Kong companies, Henlon and Great Global International, raising the prospect that they were used to launder the money. Enkhbayar, who served as prime minister and then president for a decade until 2009, told the court the charges against him were 'groundless'. He claims the case was politically motivated and remains in jail pending an appeal against his four-year jail term. The former president has been ordered to forfeit cash and property valued at US$1 million. With Mongolia holding no formal law enforcement or legal assistance relationships with Hong Kong, the prosecution did not involve local government or police assistance. The Mongolian consulate in Hong Kong has yet to comment on the case, or possible future efforts to seek investigative assistance. Documentation concerning Myagmarjargal's Hong Kong firms turned up in a series of IAAC investigations across the Mongolian capital, Ulan Bator, one of which involved the televised dawn raid on Enkhbayar's mansion in April. Local company registration documents, obtained by the Sunday Morning Post, confirm that Henlon and Great Global were formed in 2005 and Myagmarjargal has been sole director since then. The documents list him as a Mongolian passport holder with an address in Ulan Bator. Local secretarial firm Aall and Zyleman resigned as secretary of the companies in April 2010 and neither firm has filed annual returns since then. Staff at Aall and Zyleman said they had done no work for the firms since and added that their only duty was routine company filing work. They said that they had not noticed, or reported, anything suspicious about the companies. Commercial ties between Hong Kong and landlocked, resource-rich Mongolia have expanded dramatically in recent years, with Mongolian mining concerns listing, or planning to list, on the Hong Kong stock exchange. Enkhbayar encouraged these ties during a presidential visit to Hong Kong in 2008. Enkhbayar's case is being closely watched by foreign firms vying to tap Mongolia's coal, copper and gold deposits. The 55-year-old had been plotting to rebuild his rule by running in a parliamentary election in June, but the case saw him disqualified. He had been critical of foreign mining ventures and had urged new laws to tighten regulations on them. With political horse-trading still under way, Enkhbayar's allies have won enough votes to be invited into a coalition led by the Democratic Party, and the former president is still considered vital to securing unity in the months ahead.