Miner SouthGobi's HK-based lawyer held in Mongolia to aid graft probe

Hong Kong-based Australian, who is said to have alleged corruption, is 'not under arrest'

PUBLISHED : Thursday, 25 October, 2012, 12:00am
UPDATED : Thursday, 25 October, 2012, 4:29am

A Hong Kong-based Australian lawyer working for a mining company in Mongolia has been barred from leaving the country to assist with a corruption investigation by the government.

Sarah Armstrong, the 32-year-old chief legal counsel to Rio Tinto subsidiary SouthGobi Resources, was unable to board a flight from the capital Ulan Bator to Hong Kong last Friday, reports said.

Australian Foreign Minister Bob Carr said Armstrong had not been arrested.

"She hasn't been detained, hasn't been arrested. Her passport hasn't been taken from her. But the authorities in Ulan Bator are seeking to interview her further," he said yesterday.

"Not, I'm advised, about any allegations against her, but about a complex matter between the company she works for, the resources authority of Mongolia and the Mongolia anti-corruption authority."

Carr refused to comment on the details of the case involving Armstrong, who The Australian newspaper said had four months ago signed a complaint against the Mongolian government.

It is believed that officials want to question her as a witness to alleged corruption and money-laundering, the newspaper said.

Armstrong's Linkedin account lists Hong Kong as her city of residence. She began working for SouthGobi in April 2010 after previously working for Linklaters law firm, also in Hong Kong, and as corporate counsel for Xstrata Copper.

In a statement issued in Hong Kong, SouthGobi said neither it nor any of its employees had been charged with any wrongdoing.

"SouthGobi continues to cooperate with the Mongolian government agencies including the Independent Authority Against Corruption in their ongoing investigations," it said.

Rio Tinto, which has a majority stake in the Canada-based company Turquoise Hill of which SouthGobi is a subsidiary, would not comment.

The global miner was previously caught up in a foreign corruption scandal when four of its executives, including Australian Stern Hu, were arrested in China in 2009 and jailed for bribery.

Foreign Minister Carr, who opened Australia's consulate in Mongolia earlier this month, said he hoped the matter would be resolved swiftly.

"Our relationship with Mongolia is very good and I think we'll have good access in seeking to resolve this case," he said.

Australia is the biggest investor in Mongolia's mining sector, and the largest mine in the resource-rich country is backed by Australian money, he noted.

Additional reporting by Bloomberg