KazakhGold asks Nazarbayev to intervene in Polyus Gold dispute

© RIA Novosti . Alexei Nikolski  / Go to the photo bankKazakhstan's President Nursultan Nazarbayev
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Kazakh gold miner KazakhGold has asked Kazakhstan's President Nursultan Nazarbayev to personally intervene in the dispute over its acquisition of Russia's top gold producer Polyus Gold.

Kazakh gold miner KazakhGold has asked Kazakhstan's President Nursultan Nazarbayev to personally intervene in the dispute over its acquisition of Russia's top gold producer Polyus Gold, the company said on Monday.

"The initiation of legal proceedings against ... members of the Asaubayev Family appears to have triggered a surprising and unfortunate chain of events," the company said in an open letter published on the London Stock Exchange website, adding that the proceedings might have caused Kazakhstan's authorities to terminate the deal with Russia's Polyus Gold.

"The commercial and strategic rationale underlying the combination of KazakhGold and Polyus is clear and compelling - to create the leading London-listed gold producer and market leader in the CIS," KazakhGold said.

In June, Kazakhaltyn MMC JSC, a subsidiary of KazakhGold Group Limited belonging to Polyus Gold, and Jenington International Inc., controlled by the Russian company, initiated a trial at the Royal Court of Justice in London against five members of the Asaubayev family, a former core owner of KazakhGold, in relation to a violation of contract terms and fund embezzlement.

In July, KazakhGold and Polyus Gold, which owns 50.1 percent in KazakhGold via its subsidiary Jenington International Inc, announced a reverse takeover, under which KazakhGold would acquire its parent company Polyus Gold.

Kazakhstan then launched a process to terminate a reverse acquisition of Polyus Gold by KazakhGold Group. The Kazakh financial authorities suspended the accounts of KazakhGold subsidiary and core production unit Kazakhaltyn in August, as part of an investigation into alleged fraud by three members of the Polyus Gold board.

Polyus Gold is the leading gold producer in Russia and Kazakhstan and the only Russian company among the world's largest gold producers. Polyus Gold's operating mines and development projects are located in five Russia's major gold mining regions, as well as in the Republic of Kazakhstan, Romania and Kyrgyzstan.

MOSCOW, September 6 (RIA Novosti)

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