An escalating row between a Kazakh gold company’s old and new owners has tarnished the image of one of the country’s most dazzling commercial prizes. The scandal is casting doubt over the company’s future and has sent foreign investors into a tailspin.
Two Russian oligarchs are pitted against Kazakhstan’s Asaubayev family, which until last year was a driving force in the country’s gold industry through its control of Kazakhstan’s largest gold producer, the London-listed KazakhGold, which has reserves of 46.6 million ounces.
Mikhail Prokhorov and Suleyman Kerimov took over the firm last August when their Polyus Gold snapped up the controlling stake in KazakhGold. Polyus Gold bought 50.1 percent in the company and later increased its stake to 65 percent, while the Asaubayevs retained an 8.8 percent share.
The two companies then started devising plans to carry out a reverse takeover, publicly unveiling the plans on June 30. KazakhGold – a minnow of a company with market capitalization of $260 million, compared to Polyus Gold’s $8.74 billion – would swallow up its erstwhile buyer in a deal that would create the largest gold company in the CIS.
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Joanna Lillis is a freelance writer who specializes in Central Asia.