LONDON Dec 11 Kazakhstan Kagazy Plc's
paper making operations in Almaty, Kazakhstan have been raided
and accused of criminal activities and tax evasion by financial
police, the London-listed company said on Wednesday.
The raid comes as the maker of paper, board and packaging
battles former shareholders and directors Maksat Arip, Baglan
Zhunus and Shynar Dikhanbayeva in a London court where it
accuses them of fraud.
Kagazy said in a statement there appeared to be a link
between its London legal action, where on Nov. 20 the High Court
upheld a $100 million freezing injunction over assets of Arip
and Zhunus, and the raid.
"Since the injunction was upheld in London, the Kagazy group
has come under increased scrutiny from state authorities.
However, today's raid on the business shows a dramatic
escalation in the level of pressure being applied against the
The raid represents "clear disregard for due process and the
rule of law" and it "jeopardises Kazakhstan's ability to attract
foreign direct investment from multinational businesses like
Kazakhstan Kagazy," the statement quoted a spokesman saying.
Kagazy's main shareholder is now its chief executive, Thomas
Mateos Werner, a former banker and partner of wealth management
firm Werner Capital, who holds 29.9 percent.
In the London High Court Case, Isle of Man-registered Kagazy
accuses its former chairman Arip, chief executive Zhunus and
finance director Dikhanbayeva of stealing $135 million from the
company. All three deny the accusations.
Court documents say Arip and Zhunus originally owned 50
percent each of Kagazy, but reduced their holdings in the late
2000s. Arip, the papers say, is from Kazakhstan but now has dual
Cypriot/Saint Kitts and Nevis nationality.
Kagazy had an initial public offering of shares in London in
2007 raising $273 million. In 2009, it ran into financial
trouble and its controlling shareholders changed ahead of a debt
restructuring agreement that was finalised with most bondholders
and creditors in 2011.
Its shares were worth a total of about $12 million at the
close of trading on Wednesday.
Arip is also the founder of Russian oil producer Exillon
Energy Plc, another company whose shares are listed in
London. He approached Exillon about repurchasing it earlier this
year, but later sold his stake to Russian businessmen Alexei
Khotin who is considering his own approach for the company.