American telecom exec goes on trial in Kazakhstan

By Olzhas Auyezov

ALMATY, June 15 (Reuters) - A U.S. executive went on trial in Kazakhstan on Friday charged with stealing money from a local company he used to manage, a case that some observers say raises concerns for foreign investors in the Central Asian country.

Menachem Seidenfeld, 38, has been charged with the theft of 3.4 million tenge (about $27,000) while buying equipment for telecommunications company Arna. The sum has been reduced from an initial figure of $40,000.

Seidenfeld pleaded not guilty on Friday.

He was arrested in December 2005 in Russia, where he worked as mergers and acquisitions director for Golden Telecom GLDN.O and extradited to Kazakhstan last year.

He has said in media interviews he believes the case was brought in retaliation for his insistence on selling a large stake in Arna through an open auction.

Competitive bidding made the company's current owner pay more for the shares than he was willing to, Seidenfeld has said.

American companies are the largest investors in oil-rich Kazakhstan's booming economy.

Most of that investment is from oil majors with access to the government. Smaller foreign investors report problems with corruption, and international lawyers say the country's courts are not independent of government or other influences.

"It seems ridiculous that for an alleged theft of $40,000 he has already spent more than a year and a half in jail," said one member of the foreign business community who spoke on the condition of anonimity. "Justice delayed is justice denied".

"I think the perception (of Kazakhstan by foreigners) is already being harmed by this kind of case. It makes everyone feel a bit at risk," he added. "I don't want to spend a year and a half in jail if I have a dispute with my business partner".