While the public is distracted by Batken tragedy, the deputies of the Parliament of Kyrgyzstan continue to swiftly pass dubious bills.
Japarov’s «cat» gives result
On May 6, the deputies amended the law on joint stock companies and the Criminal Code. The essence of the changes comes down to one thing — «in case of a threat to life and the environment, external administration is introduced for three months.»
The author of the next legislative wonder was a deputy Akylbek Japarov, who concurrently heads the state commission for checking the activities of Kumtor enterprise.
Akylbek Japarov noted that the changes apply only to companies that work under a concession agreement. «We have only one company working under such an agreement. This is Kumtor company,» he stressed.
«This company has already caused $ 3.2 billion damage and killed 19 people. The threat has not been eliminated until now. The company has always closed criminal cases using money,» Akylbek Japarov said.
Interestingly, the bill was submitted for public discussion only on April 30. A month is given for discussion. But the document has been adopted in three readings at once already on May 6.
The initiator explained this by the fact that the Prime Minister Ulukbek Maripov asked to speed up adoption of the bill.
It is doubtful that both of them have such serious authority to push some draft law so quickly through the Parliament and get 98 votes of deputies at once.
By the way, when Akylbek Japarov was appointed the head of the state commission, President Sadyr Japarov made an interesting statement: «The colour of the cat doesn’t matter as long as it catches the mice.» Therefore, it does not matter who checks, the main thing is that it brings Kyrgyzstan useful results.
Against common sense
The State Commission on Kumtor also completed its work on time. Its results are promised to be presented to the deputies next week. Most likely, everything will be bad at the enterprise. No, just terrible. By the way, we have a corresponding law.
Quite frankly, it is not entirely clear what Mr. Japarov means by external administration. After all, Kumtor is already run by foreign investors.
«Amendments to the law on joint stock companies, which provide for the possibility of introducing external administration, is contrary to common sense,» Executive Director of the International Business Council Askar Sydykov told 24.kg news agency.
«We need to prevent adoption of such changes. After all, external administration is introduced when an enterprise has difficult times, it does not cope with the problems. In this case, an external manager is needed to help the company,» he said.
It is interesting that Kumtor has problems only with the authorities. They have some kind of continuity at least in it.
The country’s new president, Sadyr Japarov, said that everything would change: «Business must believe in the impartiality, fairness and objectivity of the judicial system. As part of the planned judicial reform, protection of private property rights will be strengthened and the institute of arbitration courts will be developed.»
Ecological coincidence
Do you remember the amount of damage of $ 3.2 billion, which Akylbek Japarov announced when the bill was passed? It pops up again. In April, four environmental activists sued Kumtor. The amount is $ 3.2 billion. By a strange coincidence, one of the plaintiffs is the son of the Chairwoman of the State Committee for Ecology and Climate, Dinara Kutmanova, who is also a member of the state commission on Kumtor.
When filing claims with compensation for damage, a state fee of 10 percent is paid in Kyrgyzstan. Where did the activists get such a sum?
But Ulukbek Maripov appears here again. On May 3, 2021, he signed the government decree No. 177, amending the government decree on Approval of State Duty Rates dated April 15, 2019, No. 159.
«A one-time amount of the calculated rate is charged from claims of individuals and legal entities for compensation for damage caused by negative impact on the environment, for violation of environmental legislation, irrational use of natural resources (100 soms. — Note of 24.kg news agency),» the document says. Previously, environmental claims were not mentioned in these decrees at all.
Claims against Kumtor have been filed in April, but for some reason the court did not demand payment of the state duty at that time. And everything is legal now.
Mine seizure option
The Canadian Centerra, no matter which way you look at it, takes a vulnerable position in Kyrgyzstan. Nobody will hold a rally in its support. As for its nationalization, a rally can quite possibly be held next week already. The authorities, apparently, will bypass this unpleasant in all respects word — speaking about «external administration».
There is a possibility that on the basis of the decision of the state commission and with the help of a new law, which the president will certainly sign in the near future, Kumtor will be claimed to the maximum. Maybe it will do without forcible seizure, but no one can say for sure.
What will the state do with such a gold asset? About $ 1 million is needed daily to keep the mine running. There is clearly no such money in the budget. No one sane will give us a loan for such a «gold project». Apparently, an «external manager» will appear soon.
The problem is that we are unlikely to be able to sell the gold produced at the mine on the stock exchanges, if Centerra applies to international arbitration. This means that either Kyrgyzaltyn or the National Bank will have to buy it out. The last one has enough reserves for four months.
It is likely that the authors of such a «gold project» will be quite satisfied with the three-month period specified in the bill. Then the mine will be returned to Centerra, or maybe they won’t.
One gets the impression that the authors of the «gold project» are not interested in the further fate of the enterprise, which gives more than 10 percent of the country’s GDP and about 15 percent of all taxes. It is unlikely that they care about the image of the republic, and about its so-called investment climate.
Another option
Such a development of the situation, which will turn away all possible investors from Kyrgyzstan, cause serious reputational losses, may not occur.
Not only the activists filed lawsuits against Kumtor, but also the Tax Service. It requires additional taxes and social security contributions in the amount of over $ 170 million.
The stock of shares in Centerra, which belongs to Kyrgyzstan, is currently estimated at $ 760 million. Surely, after all that is happening, it can fall in price.
Then an alternative proposal could follow — to exchange these shares for a mine or create a joint venture. Someone will have to deal with expensive production. In this case, international litigation can be avoided. It’s not a fact that Centerra can seriously think about new proposals from Kyrgyz partners.
Although, everything that is happening can be a chain of random events. The President did not say his last word yet. Since May 5, all responsibility for what is happening in the country lies with him. Well, or with those who he considers as such. Two names have already been announced.
