By Andrew Callus
LONDON Dec 12 Kazakhstan Kagazy said its
paper making operations in Almaty were raided this week
by financial police who accused the company of involvement in
criminal activities and tax evasion.
The raid, revealed by the maker of paper, board and
packaging on Wednesday and confirmed by Kazakh financial police
on Thursday, comes as the London-listed company battles former
shareholders and directors in a London court where it accuses
them of fraud.
Kagazy said in a statement there appeared to be a link
between the Almaty raid and recent developments in its London
legal action against Maksat Arip, Baglan Zhunus and Shynar
Dikhanbayeva. On Nov. 20, the London High Court upheld a $100
million freezing injunction over assets of Arip and Zhunus.
"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
A spokeswoman for the Almaty regional financial police said
"This (raid) was part of checks within the framework of a
criminal case brought against the company".
She said she was not authorised to comment further on the
nature of the charges against the company, or on Kagazy's
suggestion of a link between the raid and the London court case.
Kagazy's statement went on to say the raid represented
"clear disregard for due process and the rule of law" and
"jeopardises Kazakhstan's ability to attract foreign direct
investment from multinational businesses like Kazakhstan
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, the 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
Arip, the court 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.
Kazakhstan ranks 133rd for transparency - jointly with
Russia and a number of others in a list of 176 countries
compiled by the activists Transparency International. But it has
attracted more foreign direct investment than most post-Soviet
economies - some $170 billion to date - thanks in large part to
its wealth of mineral resources.