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SECTION NEWS
03/08/16 09:28  

Trench upon the sacred

14/07/16 08:11  

Judgment Day

18/05/16 08:45  

Waiting for justice

05/04/16 11:52  

It's all about the date

About the victim of dividends

15/07/14 08:14, Bishkek – 24.kg news agency, by Arstan AALYEV

A high-profile case of the "golden dividends" of Centerra Gold Inc. threatens to fail in court?

Oktyabrsky District Court of Bishkek left the ex-chairman of OJSC "Kyrgyzaltyn" Diliger Zhaparov in the pre-trial detention facility of GKNB until July 28, extending his stay in custody for another month. The last, recall, was detained on May 28 upon a criminal case, initiated by the Prosecutor General Office. The supervisory authority suspects Zhaparov in withdrawals of funds of Kumtor gold mining project.

Everything that is connected with Kumtor gold in Kyrgyzstan indulges in publicity. However, there is an exception of this rule. Zhaparov's case, apparently, one of them. The reason is banal. The prosecutor's office, apparently, is not sure of the fault of the former Chairman of "Kyrgyzaltyn" board and the investigation actually is deadlocked. However, the case isn't closed yet, it is likely to remain a tool of the amusing parapolitical bargaining.

General Prosecutor's Office opened a criminal case, "finding" that in December 2013 CJSC Kumtor Gold Company (KGC) has transferred to the accounts of Centerra Gold Inc. $200 million in dividends. The board of directors of KGC gave approval for this operation, which at that point was headed by Diliger Zhaparov. Ground for suspicion was the fact that on the results of 2012 the mine didn't bring any profit. What then was transferred to the accounts of "Centerra"? Whether Canadian investor decided to withdraw money from the project because of the threat of nationalization, which the company continues to be frightened by the Parliament?

But, alas, high-profile, at first sight, case, apparently, threatens to fail. The scandal seems isn't worth a dime. Unless, of course, its goal was not either the replacement of the head of  Kyrgyzaltyn, who tried to protect the investment climate from the negative impact of parliamentarians, or pressure on "Centerra" - for the early conclusion of negotiations on the future of project. If the first version is correct, the result is more than doubtful. The newly appointed head of "Kyrgyzaltyn" Tokon Mamytov showed himself not only independent person, but also decisive. It is too tough for the Parliament. So, maybe, in this case the second version is correct?

The Government of Kyrgyzstan, of course, assures that the investigation of the General Prosecutor's Office can not be regarded as pressure on the investor. But at any rate, in Toronto the head office of "Centerra" perceived it with concern. Its management, according to some data, even insisted on guarantees for security of corporate executives, whom Kyrgyzstan is waiting for the negotiations on Kumtor. General Prosecutor's Office, as the Prime Minister of the Kyrgyz Republic Dzhoomart Otorbayev stated later, agreed not to impose a restriction on movement of Centerra management on the territory of the republic that indirectly confirms: threat still existed. But how it was justified? And whether it is reasonable to use similar arguments in the negotiations?

There aren't any answers to these questions yet. But there are some facts to understand what is happening. With their help,you can try to shed some light on what all lawyers are now crossing swords.

So, importantly: one can hardly argue with the fact that any shareholder is entitled to have dividends. JSC, CJSC and similar communities are created for gaining profit and not for charity, isn't it? Whether it is possible in this case to deny "Centerra" as the sole shareholder of KGC in the right to dividends? Especially that this right is enshrined in law.

Profit - is a property, and according to the laws of the Kyrgyz Republic "On Investments in the Kyrgyz Republic" and "On Concessions and Concession Enterprises in the Kyrgyz Republic", Centerra has the right to freely repatriate incomes from investments in the territory of the Kyrgyz Republic, including dividends and to dispose of profit, including the transfer of funds abroad. Do employees of the prosecutor's office know about it? Obviously, the supervisory authority knows about it. Random people, usually, do not enter this system.

Was there a profit? To the great disappointment of the skeptics, it was. Not only for 2012, which is due to political and technical reasons was really unprofitable for the project. At the end of 2012, for your information, the mining company had on its balance retained earnings for previous years in the amount of $779 (!) million. The money was kept in the accounts of KGC, although "Centerra" even earlier had every right to demand payment of dividends. The Law "On Joint Stock Companies" in the KR, which probably the Prosecutor General of the republic knows, does not prohibit payment of dividends over the past years, but only specifies the minimum amount of dividends for mandatory payment.

Now it is clear that until then the investor does not exercise this right, as, apparently, did not rule out that the funds will be required for development of production. If Centerra acted differently, "Kumtor Gold Company" would have to raise loans at interest. Thus, the corporation actually reduced costs that would lie on the shoulders of all of its shareholders, including Kyrgyzstan.

By the way, unlike "Centerra", Kyrgyz side prefers not to wait, but demand dividends immediately. And as a shareholder of the corporation, by the way, gets them on a quarterly basis. Whether it is fair to interfere with receiving of dividends by others? Especially that it is not prohibited. Payment of dividends, according to the letter of the same Law "On Joint Stock Companies" of the KR, you can not, only if this joint-stock company - is a bankrupt. But "Kumtor", anyway, is not a bankrupt.

Anticipating questions about whether we can pay dividends once a few years, it is enough to recall that this practice exists. Including Kyrgyzaltyn. The main shareholder of it - the state - in 2010 it declared about payment of dividends for a couple of previous years. Information about this can be easily found on open access.

Given these facts, you find yourself wondering: if it was necessary to raise scandal around what is legal? And if it so, whom it was profitable for?


URL: http://eng.24.kg/parliament/170914-news24.html
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GLANCE
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QUOTES

«When we ran in the elections, we said that would even get the moon and the sun from the sky ».
MP Kamchybek Joldoshbayev at a meeting of Parliament, February 2, 2017.

«What have you done besides sale of donkeys to China?».
Deputy Ryskeldi Mombekov to the head of State Inspectorate for Veterinary and Phytosanitary Safety Kalysbek Zhumakanov at a meeting of Parliament, February 1, 2017.
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