Thursday, August 12, 2010

KazakhGold Disputes Are Hurting Company

Investors are getting nervous about the future of KazakhGold, Kazakhstan's largest gold producer, which was acquired last year by the much larger Russian company, Polyus Gold, owned by Russian oligarchs Mikhail Prokhorov and Suleyman Kerimov. In June, the new owners unveiled plans for a reverse takeover transaction that would allow Polyus Gold to take advantage of the London stock exchange listing of Kazakh Gold. However, the Kazakh authorities have unexpectedly denied permission for the takeover to proceed and have frozen the accounts of Kazakhaltyn, the company's main subsidiary, alleging that actions taken by the new owners violated Kazakh's legislation on subsoil assets. Meanwhile, Polyus Gold is pursuing a claim in London against KazakhGold's former owners and current minority shareholders who belong to Kazakhstan's powerful Asaubayev family.

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