Putin to step into $450M KazakhGold feud
September 07. Central Asia Newswire
By Rowena Mason
Russia’s Prime Minister Vladimir Putin is today expected to intervene in a $450 million corporate battle over the KazakhGold company.
The row is currently being thrashed out in London’s High Court between Russia’s second richest oligarch, Mikhail Prokhorov, and a powerful Eurasian family, the Assaubayevs. According to sources, the disputed gold fields are on the agenda at a meeting between Putin and Kazakh President Nursultan Nazarbayev taking place on Tuesday.
The case centers around the $500 million company KazakhGold, whose international shares, known as global depositary receipts (GDRs), are listed in London. It started last year after the founders of KazakhGold, the Assaubayevs, sold a majority stake in the company to Polyus, a $10 billion Russian gold giant chaired by Prokhorov, the metals tycoon, for $254 million. The Russians now claim they were deceived over the sale, according to the London lawsuit.
However, the row escalated when Kazakhstan’s government froze some bank accounts of KazakhGold and put three of its directors under investigation for alleged fraud.
Yesterday, KazakhGold made a final plea to Nazarbayev to drop the fraud allegations and unfreeze its bank accounts. In a letter, it wrote, “The actions by the Kazakh authorities are not only to the detriment of the companies concerned and the thousands of employees whose incomes depend on it, but also may call into question the reputation of Kazakhstan itself as a forward looking, growing economic centre and secure investment destination.”