KazakhGold's Bank Accounts frozen by Financial Police amid Fraud Probe
By Ilya Khrennikov
KazakhGold Group Ltd., the mining company bidding to take over its parent OAO Polyus Gold, said Kazakhstan froze bank accounts belonging to its main production unit as three board members are investigated for fraud.
Kazakhstan’s financial police are studying allegations against KazakhGold Chairman and Polyus Chief Executive Officer Evgeny Ivanov, his deputy German Pikhoya and KazakhGold CEO Alexey Teksler, KazakhGold said today in a statement. The company “strongly refutes” the allegations, which are “without factual or legal basis,” it said.
Polyus, the Russian gold producer that bought 50.1 percent of London-listed KazakhGold last year from the Assaubayev family, is now the subject of a reverse takeover bid. KazakhGold said July 27 that shareholders had approved resolutions relating to the merger, even after the Kazakh Industry Ministry ruled out the sale of additional shares by KazakhGold as part of the deal.
A month earlier Polyus said it was suing the Assaubayevs, alleging the family deceived the company into making a partial offer for KazakhGold by misrepresenting production and sales revenue. The Assaubayevs said the claims were “without any foundation.”
The actions of Kazakhstan’s financial police may prevent KazakhGold from paying wages to 4,000 employees in the country, according to the statement, according to Bloomberg.