Johannesburg - Mongolia has issued a travel ban on a New Zealand national consulting for Standard Bank Group Ltd. amid an escalation in a dispute with a local company over a debt repayment.

Chris Bradley was part of a five-person team from Africa’s biggest lender that visited Ulaanbaatar last month to seek talks with the government over $131 million in loans to Just Group LLC, a holding company, said two people familiar with the matter.

The people asked not to be named because they aren’t authorised to speak publicly.

Ross Linstrom, a spokesman for the bank in Johannesburg, confirmed on December 4 that Bradley hasn’t been allowed to leave Mongolia.

“Standard Bank is cooperating with the Mongolian authorities and therefore believes it inappropriate to comment any further at this stage,” Linstrom said.

Standard Bank alleges the loans are in default and filed a lawsuit in July in a London court seeking repayment.

Standard’s loans were made between 2007 and 2010 to Just Group to fund raw materials supplies and debt repayments at state-controlled Erdenet Mining Corp. and Ulaanbaatar Railways, according to a document obtained by Bloomberg News.

Bradley said by phone on December 2 that he had been due to depart Mongolia on November 29, but “is restricted by the authorities from leaving.”

Bradley said he was advised of his situation by local police and that he is a suspect in an investigation.

Tugsbayar Nasankhuu, a captain in the National Police Agency’s Press and Information Division, declined to comment on December 4.

Assist Police

“I went in gladly to assist the police and compare notes,” said Bradley.

“We are focusing on the commercial aspects of this transaction and they are focusing on the criminal aspects.

The two, although linked, are also running in parallel.”

Mongolia has barred foreign executives from leaving the country during investigations into companies before.

Justin Kapla, a US citizen and then-president of coal miner SouthGobi Sands LLC, was banned from departing at the end of last year and is still in the country, after the nation’s Independent Authority Against Corruption launched a probe into the company’s mining licenses.

Sharavlamdan Batkhuu, Just Group’s controlling shareholder, and other companies in the group have defaulted on loans since 2011, Danjilaa Ganbat, director of the banking supervision department at Mongol Bank, the nation’s central bank, said in July.

Ganbat made his comments after Just Group’s Savings Bank, Mongolia’s fifth-largest lender, was declared insolvent due to affiliated companies defaulting on loans. Batkhuu and Just Group are among the defendants in the Standard Bank lawsuit.

Just Group

Neither Batkhuu nor other representatives for Just Group could be reached for comment.

A visit to a Just Group office address in Ulaanbaatar found it to be unoccupied.

Standard Bank wasn’t able to arrange any meetings with Mongolia’s government to resolve the debt dispute, the people familiar with the matter said.

Bradley was the Mongolia specialist on the team and the only member not directly employed by the bank, said one.

Bradley said he worked as an employee of Standard Bank from 1999 to 2001, and has consulted on a contract basis for the bank over the last nine years, including five visits to Mongolia since May “to engage with the government on our issues, the debt recovery.”

Cabinet Secretary Saikhanbileg Chimed said by e-mail on December 3 that he thinks it’s better to solve the debt dispute out of court and planned to “push appropriate people to respond.”

Bradley, 50, is a native of Hokitika, New Zealand.

“In the absence of a New Zealand consulate, the British Embassy is working on behalf of Mr Bradley’s consular welfare,” said Julian Pearson, Deputy Head of Mission at the British Embassy in Ulaanbaatar, on December 2. - Bloomberg News