Mongolian cashmere giant Gobi (GOV) mulls going private after 18 years, with a special shareholders' meeting set for September 8.

What happened?

In July, Gobi's CEO B.Amarsaikhan became the subject of public attention following reports of an altercation involving the sons of a Erel Group founder and former Member of Parliament Ts.Tserenpuntsag. The incident reportedly occurred while the parties were under the influence of alcohol and drugs, resulting in serious injuries to the victim. Before law enforcement could proceed with an investigation, $GOV’s CEO fled to South Korea. Although he was expected to return to Mongolia on July 27, he did not do so and has since left South Korea for another country. 

• ⏰ The timing of Gobi's move to convene a shareholders’ meeting, without addressing the leadership crisis, has only intensified public backlash.

💥 The Bigger Picture

Currently, Tavan Bogd Holdings LLC holds a dominant 87.3% stake in Gobi, with 12.6% owned by minority shareholders and just 0.1% held by employees. Notably, $GOV has not issued any dividends since its last payout of ₮6.8 per share in 2018. Over the past 5 years, 6 companies have voluntarily delisted from the Mongolian Stock Exchange (MSE) to become private entities. Among them are Mon Beef and Juulchin Duty Free, both subsidiaries of Tavan Bogd Group, which exited the exchange almost simultaneously in the fall of 2023.

• 🙊 What if? If Gobi follows the same path, only Khan Bank (KHAN) would remain publicly traded from the Tavan Bogd Group portfolio.

Even though Gobi's CEO scandal has drawn the most public attention, many argue that Mongolia’s current regulatory environment places more burden than benefit on publicly listed companies. In the context of an evolving capital market, this underscores the urgent need for stronger incentives to keep companies public, while also ensuring better protection of retail shareholders’ rights.