Centerra units file motion seeking penalties against Kyrgyzstan government

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Signage is seen at the United States Bankruptcy Court for the Southern District of New York in Manhattan, New York City, U.S., August 24, 2020. REUTERS/Andrew Kelly

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Aug 26 (Reuters) - Centerra Gold Inc's (CG.TO) units on Wednesday filed a motion in a U.S. Bankruptcy Court seeking penalties of $1 million a day against the Kyrgyzstan government, related to the seizure of the Canadian company's Kumtor gold mine.

Centerra Gold said in May, its Kyrgyzstan units Kumtor Gold Co (KGC) and Kumtor Operating Co (KOC) commenced bankruptcy proceedings in a U.S. court following nationalization of the miner's Kumtor gold mine by the former Soviet republic. read more

The government seized control of Kyrgyzstan's largest foreign investment project in May in a move challenged by Centerra Gold through international arbitration.

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Kyrgyzstan has established enough evidence to press on with removing Centerra Gold from the Kumtor gold mine, the state security service and prosecutors said earlier this month.

The security service is investigating possible corruption in the deal that gave Centerra control over the country's biggest gold mine and subsequent amendments to the agreement. Centerra has denied all the allegations.

The motion filed by the Canadian miner on Wednesday also seeks an order staying the Kyrgyz government's efforts to dismiss the case. (https://bit.ly/3Befoib)

Attorneys for KGC and KOC will present this motion to the United States Bankruptcy Court for the Southern District of New York at a hearing to be held on Sept. 15.

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Reporting by Arunima Kumar in Bengaluru; Editing by Vinay Dwivedi

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