BNY Mellon freezes $22 billion owned by Kazakhstan

Kazakhs are immensely proud of their new capital

The Bank of New York Mellon has frozen $22 billion in assets belonging to Kazakhstan, Reuters reports. The decision comes ahead of a lawsuit brought by a Moldovan businessman against the country.

The money belongs to Kazakhstan’s National Fund, which is made up from the country’s oil revenues.

The Moldovan businessman, Anatolie Stati, has been involved in a legal row with Kazakhstan for many years.

Stati had investments in Kazakhstan’s oil and gas industry and claims the government forced him into selling his assets cheaply. Kazakhstan denies the allegations.

This October, Kazakhstan filed a lawsuit against Stati’s companies in the US District Court in Washington, DC following an arbitration award of around $500 million Stati Partners won in an international arbitration court.

The freezing of the assets comes weeks after President Nazarbayev threatened to sack his cabinet if they failed to make large state companies bring back cash held abroad.

Nazarbayev, who wields sweeping powers in the oil-rich nation, poured scorn on private sector executives who, he suggested, were enjoying lavish lifestyles while keeping funds in foreign accounts.

Kazakhstan’s dollar bonds extended losses on Thursday, dropping as much as a quarter percent across the curve after sharper falls late on Wednesday. The country’s currency the tenge has firmed against the dollar.

The Central Asian country has the 55th largest economy in the world with a $137 billion gross domestic product.