Update on freezing order over kazakhaltyn’s bank accounts
Aug 16. KazakhGold
Further to the announcements of 5 August 2010 and 9 August 2010 by KazakhGold Group Limited (“KazakhGold” or “the Company”) in relation to a freezing order that had been placed by the Agency on Economic and Corruption-Related Crimes (“AECC”) in Kazakhstan over certain bank accounts held in Kazakhstan by the Company’s main operating subsidiary, JSC Kazakhaltyn MMC (“Kazakhaltyn”), the appeal by Kazakhaltyn to lift the freezing order was refused at a court hearing in Kazakhstan, and, as a result, the freezing order remains in place.
Kazakhaltyn has received express permission from the AECC to access funds in the frozen accounts in order to make wage payments to its employees and pay taxes and other payments to municipal authorities in order to avoid social tensions among the workforce. In addition, the AECC has permitted the payment from the frozen accounts of certain other operating expenses that are necessary for the continuation of Kazahaltyn’s operations and has indicated to Kazakhaltyn that it is willing to consider permitting further payments on a case by case basis in order to enable Kazakhaltyn’s operations to continue. Kazakhaltyn is cooperating with the AECC in order to seek to ensure that such payments can be made on a timely basis so as to minimise the impact on its operations. While access to the funds in the frozen accounts continues to be subject to the sole discretion of the AECC, there remains the risk of unexpected disruption to Kazakhaltyn’s operations.