Kyrgyzaltyn board chairman arrested in Centerra Gold case

BISHKEK, May 29 (RAPSI, Yulia Orlova) – Dilger Japarov, board chairman of Kyrgyzaltyn JSC, Kyrgyzstan's state-owned mining company, has been arrested on suspicion of an illegal dividend payment worth $200 million to Centerra Gold, RIA Novosti learned Thursday at the Prosecutor General’s Office of Kyrgyzstan.
Centerra Gold Inc. is a Canadian company that owns development licenses for the Kumtor deposit in Kyrgyzstan and a number of deposits in Mongolia, Russia, Turkey and the United States. Kyrgyzaltyn is a Centerra shareholder.
Kyrgyz investigators have established that in December 2013, Kumtor Gold Company, a subsidiary that is 100% owned by Centerra Gold, decided to pay $200 million in dividends for 2012 to its only shareholder without coordinating the issue with, or notifying the Kyrgyz government. It is all the more questionable that the company reported a negative balance for 2012.
Centerra refused to pay 2012 and 2013 dividends to Kyrgyzstan, which owns a 32.75% stake in the gold producer through Kyrgyzaltyn.
Centerra Gold Inc is developing the Kumtor deposit within the framework of Kyrgyzstan’s largest industrial and investment project. Kumtor assets have been estimated at $1.665 billion. Last year, Kyrgyz authorities began restructuring its contract with Centerra at the request of the public.
Kyrgyzaltyn is the largest gold mining company in Kyrgyzstan. It produces 97% of the gold in Kyrgyzstan, which is the third largest gold producer in the CIS, in cooperation with its partners.
Kumtor is the largest gold mine operated in Central Asia by a Western-based company, having produced more than 9.2 million ounces of gold between 1997 and the end of 2013.