bne -

Former Mongolian president and current opposition leader, Enkhbayar Nambar, has been arrested on corruption charges, with uniformed and plainclothes police seizing him in a dawn raid on a house to which he fled after he had refused to answer questions about corruption, the government has announced.

Given the arrest occurred just hours after Enkhbayar released a transcript of a security council meeting concerning the supposed illegitimacy of the 2008 elections that led to deadly riots and weeks before Mongolians go to polls in June for general elections, analysts suspect darker motives.

After occupying the presidency for the four years to 2009, Enkhbayar is now head of the new MPRP party - a splinter party that took the name of the old Communist Party after the original changed its name to MPP (Mongolian People's Party). Enkhbayar is aiming to use his still considerable influence to win back votes in June.

Reports are swirling that protests by Enkhbayar supporters are being organised, and bne has already seen crowds gathering in Sukhbaatar Square, while workers in the centre of Ulaanbaatar were sent home early on Friday, April 13. Enkhbayar's support is still fierce, despite being haunted by charges of corruption since he left office.

Enkhbayar was arrested for questioning in a serious corruption case, the head of the Independent Agency Against Corruption, E. Ambarbat, told a press conference. Though Ambarbat did not elaborate, the agency said the corruption involved the illegal privatization of a government-owned hotel. "We have been investigating the corruption case involving Enkhbayar for a year. However, he never showed up for questioning. We had asked him often to come for questioning," Ambarbat said.

However, the arrest occurred shortly after a press conference organized by Enkhbayar at which he released a classified document from the National Security Council. The leaked transcript sheds a new light on past elections and the protests that followed on July 1, 2008, which resulted in the deaths of five people.

Enkhbayar told reporters: "The 2008 parliamentary election was corrupt. The people have the right to know who is responsible. People lost their lives. I want to tell the truth about the incident. The discussion of the meeting of the National Security Council is classified information. This should be changed. Parliament and the National Security Council can change this. Because it is classified, the public is unable to receive correct information. I have met with the administrations of the party two times to discuss this. I would like to turn over 300 pages of material."

Investors are already starting to fret about what this means for a country that has been the darling of the emerging market investment community due to its double-digit economic growth fueled by the exploitation of its vast, untapped mineral resources. On the one hand, one analyst at Eurasia Capital told bne, rising political tensions would undoubtedly hurt stock market valuations; but at the same time, the arrest could be taken as sending out a strong message on anti-corruption enforcement. "In case of the conviction of Mr Enkhbayar on corruption charges, it will indicate even stronger anti-corruption regulatory enforcement and rule of law, which would be positive influence for Mongolia and investors," the analyst said.