Category Archives: Uncategorised

Kyrgyzaltyn changes board composition

JUNE 17 2016 (The Conway Bulletin) – Kyrgyz state-owned miner Kyrgyzaltyn said in a note that it had changed the composition of its board. Askar Oskombayev, adviser to the PM, will now serve as chairman, replacing Duishenbek Kamchybekov. Kyrgyzaltyn owns 32% of Canada’s Centerra Gold, which owns and operates the Kumtor gold mine in eastern Kyrgyzstan. Centerra and the government are currently embroiled in a legal battle to resolve disputes over ownership of the gold mine.

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(News report from Issue No. 286, published on June 24 2016)

Editorial: Nazarbayev’s reshuffle

JUNE 24 2016 (The Conway Bulletin) – When Kazakh president Nursultan Nazarbayev reshuffles his top government officials, it’s time to start thinking about the politics of succession.

The latest reshuffle is an important one. Apart from the PM post, held by Karim Massimov, one of Mr Nazarbayev’s most trusted aides, the head of the presidential administration, the speaker of parliament and mayor of Astana are some of the most important and high-profile posts that he can hand out.

Mr Nazarbayev has promoted the slick, media-savvy Asset Issekeshev to be major of Astana, Adilbek Dzhaksybekov was shifted from that position to head of the presidential administration and Nurlan Nigmatullin, was moved to be speaker of parliament.

All are now guaranteed to play a role inMr Nazarbayev’s plans but perhaps the most eye-catching is the promotion ofMr Issekeshev. He will now be the face of EXPO-2017 in Astana, one ofMr Nazarbayev’s pet project. If that goes smoothly, there could be even more important roles forMr Issekeshev.

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(Editorial from Issue No. 286, published on June 24 2016)

BGEO buys major Georgian utilities company

TBILISI, JUNE 23 2016 (The Conway Bulletin) — BGEO, a London-listed holding company that owns Bank of Georgia, said it bought the 75% stake it didn’t already own in Georgian Global Utilities which controls some of the country’s biggest utility companies.

Offshore-registered Georgian Global Utilities (GGU), owns water and wastewater service providers in Tbilisi, Rustavi and Mtskheta and three hydropower generation facilities with a total capacity of 143MW. The purchase gives BGEO control over water and wastewater services for a third of the population.

In 2014, BGEO bought a 25% stake in GGU for $26.25m. It delayed buying another stake in GGU because of the uncertain position of the Georgian currency, the lari.

Now, with the new management brought in after the 2014 deal, BGEO said that GGU had improved its position and the lari currency had stabilised after losing 25% of its value.

“The combination of GGU’s strong performance during 2015 and the prospect of significant further improvement over the medium term led the BGEO board of directors to make the decision to step up the Group’s investment in GGU,” BGEO said in a statement.

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(News report from Issue No. 286, published on June 24 2016)

Irakli Gilauri, brother of former PM Nika Gilauri, is BGEO’s CEO.

Two people dies of anthrax in Kazakhstan

JUNE 21 2016 (The Conway Bulletin) – Two people died in Karaganda, central Kazakhstan, after an out- break of anthrax poisoning. Local hospitals reported as many as 73 people were being monitored for exposure. Two days after the out- break, Kazakh PM Karim Massimov said the situation is under control. Medical research says Kazakhstan has some of the highest reported human anthrax incidence and mortality rates in the world.

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(News report from Issue No. 286, published on June 24 2016)

Georgia MPs allow PM to stand in parliamentary vote

TBILISI, JUNE 22 2016 (The Conway Bulletin) — Georgian MPs voted to modify the election code to allow the PM to run for parliamentary elections without having to resign, a major blow to the opposition’s calls for separation of powers.

The bill, which included other technicalities, such as free airtime for parties, was approved with a 79-1 majority.

The defenders of the bill said that it is constitutionally illogical to be left without a government during an election campaign, or to have to form an interim government, if the PM was forced to resign to run for MP.

“To have to form a new government, which could change completely within two months, just before a parliamentary election is not appropriate for the stability of a con- constitutional system,” Vakhtang Khmaladze, MP for the Georgian Dream, said as he presented the bill.

Georgia’s President Giorgi Margvelashvili will have to sign the bill before it enters into force.

The Georgian Dream coalition, although showing cracks as the election campaign builds up, voted en masse to back the proposal, which will allow PM Giorgi Kvirikashvili to run for MP without having to resign.

On Oct. 8, Georgia will vote to elect a new Parliament. The opposing factions are already gearing up to what analysts have said will be a heated political campaign, fought between two deeply opposed sides.

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(News report from Issue No. 286, published on June 24 2016)

Kyrgyz MPs pass media bill

BISHKEK, JUNE 22 2016 (The Conway Bulletin) — Kyrgyzstan’s parliament passed the first reading of a law that will restrict foreign funding of TV channels, a move its proponents have said is vital to protect media integrity but its detractors have said limits freedom.

The bill, which will have to be passed two more times, cuts the share of foreign financing for mass media outlets down to 35% and prohibits any foreign parties from establishing TV channels in Kyrgyzstan.

Media reported that the bill had been passed by 79 votes to 30.

Medet Tiulegenov, a political studies expert, said that the bill may have been pushed through by MPs to feed off popular mistrust of foreigners and boost their profile.

“By promoting a law against foreign investments in local media, MPs are trying to listen to that part of the population, which blames foreigners for problems here,” he said. “There are many MPs, who are not well-known among the population yet, but would like to get attention and popularity.”

This is the second major stand-off in Kyrgyzstan this year between groups of conservative, nationalist MPs and rights campaigners. Earlier this year, at the final reading, parliament rejected a bill that would have banned NGOs from directly receiving foreign funding.

Critics of the bill have said that its main aim was to close down the local office of the US-funded Radio Free Europe/Radio Liberty.

Begaim Usenova, a Kyrgyz media expert, said that this law is another attempt to restrict people’s freedom. “It is incorrect to say that foreign funded media sources are a threat to the state, the bill’s initiators could not prove that there has ever been such a case,” she said.

And the bill appears to have already been watered down after protests by a few dozen people in front of parliament. Restrictions on foreign funding of media were reduced to just TV, rather than including print and radio too.

Still, the bill does carry a degree of popular support in Kyrgyzstan.

Yulia, 33, a Bishkek resident, said: “This is a good law, as every foreigner has its own interests, whereas we have to care about our security.”

And Dauren, 30, another Bishkek resident, said: “I am happy that there are more Kyrgyz patriots in our parliament than western lobbyists.”

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(News report from Issue No. 286, published on June 24 2016)

GM- Uzbekistan woes worsen

JUNE 23 2016 (The Conway Bulletin) – Rustam Radjabov, the new director of the GM-Uzbekistan joint venture, was detained by police and held in jail since the end of May on embezzlement charges, RFE/RL reported quoting sources in the company. Mr Radjabov replaced Tokhirjon Jalilov who was arrested in April for masterminding a criminal scheme over car exports to Russia. The Uzbek authorities have not confirmed the arrest. The anonymous source also said operations at the GM Uzbekistan plant are “practically suspended.” GM Uzbekistan is one of the country’s most important factories.

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(News report from Issue No. 286, published on June 24 2016)

Kazakhstan’s Kazmunaigas wants to gain more control of KMG EP

ALMATY, JUNE 17 2016 (The Conway Bulletin) — Kazmunaigas, Kazakhstan’s state-owned energy company, said it wants to change the shareholder’s agreement at its London-listed subsidiary KMG EP, a move that independent directors said would weaken the company.

Kazmunaigas, which owns 57.9% of KMG EP, released a note that called for an extraordinary general meeting in August, that would change the terms in the so-called relationship agreement, a document that was prepared in 2006, when KMG EP listed its global depository receipts in London.

Analysts have said that Kazmunaigas, which has been hit by low oil prices, may be looking to gain more control of KMG EP, which has performed better than its state-owned parent. By securing more shares and improved terms, Kazmunaigas would also strengthen its position ahead of a prospective IPO in the next few years.

But independent directors at KMG EP immediately lined up to voice their concerns about Kazmunaigas’ plans. They also said that they would resign if they were passed.

“[We] strongly recommend that all Independent Shareholders vote against the Resolutions proposed by NC KMG,” three of the four independent directors on the board of KMG EP said in a joint statement.

The directors also said the new document will “significantly weaken” independent voices in the company’s decision-making processes and the Kazmunaigas offer of $7.88/GDR to minority shareholders “significantly undervalues” KMG EP.

Kazmunaigas said a new deal would improve efficiencies at KMG EP.

And the row looks to be getting more bitter. Kazmunaigas chairman Sauat Mynbayev also said the KMG EP share price could fall by one-third to around $5/GDR if investors didn’t go along with the plan.

“I don’t think the stock price will jump, in fact, if the shareholders decide to go against our plan, it could fall to, say $5/share,” he said.

In effect, the government sent a strong signal to shareholders that it wants to increase control over KMG EP.

If shareholders choose to go against the plan, a bitter battle for control looms.

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(News report from Issue No. 286, published on June 24 2016)

Armenians criticise tax revamp

JUNE 22 2016 (The Conway Bulletin) – Political and institutional figures have harshly criticised a new tax code that parliament approved last week during the first reading of the bill. Mans Tandilyan, a high-ranking member of the Lusavor Hayastan party, said the new code will negatively affect small and medium businesses. Tigran Jrbashyan, president of the American Chamber of Commerce in Armenia, warned that, if passed, the law would send Armenia into a recession. The new tax law, approved on June 15, will increase excise taxes on fuel, tobacco and alcohol and increase income tax.

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(News report from Issue No. 286, published on June 24 2016)

Stock market: KMG EP

JUNE 23 2016 (The Conway Bulletin) – The price of KMG EP’s global depository receipts (GDRs) in London has not moved much in the past week, despite the dispute between its owner, Kazakhstan’s Kazmunaigas, and its independent directors.

KMG EP is the upstream branch of the Kazakh state-owned oil and gas company. It listed its GDRs in London after an IPO in 2006. The closing price on Thursday was $7.24/GDR, which follows a trend that since mid- May has pushed KMG EP’s GDRs above the $7 benchmark.

Despite low oil prices and decreasing export volumes, KMG EP has managed to perform well in the first quarter of the year, due to the sharp depreciation of the tenge against the US dollar. A weaker tenge helped KMG EP offset domestic costs and increase the value of its exports, denominated in US dollars, despite the plunge in global prices.

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(News report from Issue No. 286, published on June 24 2016)