ULAANBAATAR (BLOOMBERG) - Forty-two people in Mongolia have been hospitalised and hundreds are showing symptoms of illness from contaminated water and soda that health authorities linked to a KFC restaurant located in Ulaanbaatar.

The authorities from the Metropolitan Professional Inspection Agency said the local licence holder of the KFC franchise, Tavan Bogd, was responsible for the 247 cases of diarrhoea, vomiting and fever reported this month.

Officials said they found serious violations in health standards and a failure in internal hygiene controls. Lab tests detected bacteria in the drinking water and E. Coli in soda.

Tavan Bogd Group launched its first KFC location in 2013, under its subsidiary Tavan Bogd Foods, and has since expanded to more than 10 locations in the capital city.

Yum! Brands Inc, which oversees the Mongolia franchise, and Tavan Bogd, which also holds rights to Yum's Pizza Hut chain of restaurants in Mongolia, did not immediately respond for comment.