Tag Archives: business

Donald Trump in hot water over Azerbaijani deal

JUNE 4 2016 (The Conway Bulletin) — Donald Trump, the presumptive Republican party candidate for a presidential election later this year, has quietly ditched a real estate project in Azerbaijan that had been linked to an father-son combination allegedly connected to the Iranian military, the AP news agency reported.

Mr Trump had made the initial deal in Baku in 2013 with Anar Mammadov. His father Ziya Mammadov is a government minister and is also alleged to be linked to various money laundering schemes as well as to the Iranian military. Although some sanctions were lifted on Iran earlier in the year, it is still an offence to do business with the Iranian Republican Guard.

Mr Trump has not commented on the case although his staff have said that the project had been delayed because of economic conditions.

ENDS

(News report from Issue No. 284, published on June 10 2016)

Armenia launches smartphone

JUNE 6 2016 (The Conway Bulletin) — Under the slogan “It’s time for Armenian products”, a mobile phone designed and built in Armenia by a US-Armenian joint venture went on sale in Yerevan.

The ArmPhone smartphone retails at between $100 and $300. It also, importantly, goes some way to boosting Armenia’s ambitions of becoming a genuine tech hub in the South Caucasus.

This is the second device that the JV, Technology and Science Dynamics Inc, has unveiled. In February 2014, it launched the ArmTab tablet.

Vahan Shakaryan, chairman of Technology and Science Dynamics Inc, said the company would sell the ArmPhone across the FSU and establish a shop in Moscow.

“It is important to note that our product is high quality and we stand behind and take responsibility for the quality of our product,” media quoted him as saying. “We produce in Armenia, we are with our con- sumers and take full responsibility for every step, from production to customer service.”

ENDS

(News report from Issue No. 284, published on June 10 2016)

Telia to sell subsidiaries in Azerbaijan, Georgia, Uzbekistan

JUNE 6 2016 (The Conway Bulletin) — Investigations into corruption allegations at its subsidiaries in Central Asia has slowed a sale by Swedish telecoms operator Telia Company, formerly TeliaSonera, of its 59% stake in Netherlands-based holding company Fintur to Istanbul-based Turkcell, sources involved in the sale told Bloomberg News. Fintur is valued at $1b and owns telecoms subsidiaries in Kazakhstan, Azerbaijan, Georgia, Tajikistan, and Moldova.

ENDS

(News report from Issue No. 284, published on June 10 2016)

Kazakhstan signs military deals with Russia

JUNE 8 2016 (The Conway Bulletin) — In three separate deals, Kazakhstan bought a range of military kit. State-owned Russian Helicopters signed an agreement with the ministry of interior to supply helicopters until 2020. Days later, the Russian defence ministry said it would supply Kazakhstan with anti- aircraft missiles for free. In addition, China’s Chengdu Aircraft Industry Company sold two combat and reconnaissance drones to Kazakhstan’s Air Force, the company’s first sale in Central Asia.

ENDS

(News report from Issue No. 284, published on June 10 2016)

Kazakhstan oilfield output to fall

JUNE 6 2016 (The Conway Bulletin) — Tengizchevroil (TCO), an international consortium operating the Tengiz oilfield in western Kazakhstan, said it will produce 26.4m tonnes of oil in 2016, 2.8% lower than last year. Chevron-led TCO didn’t give a reason for the drop in production. Tengiz is Kazakhstan’s most productive oil field, though, and a drop in its production is likely to have an impact on Kazakh government earnings.

ENDS

(News report from Issue No. 284, published on June 10 2016)

Fashion firms accuse Turkmenistan of using forced labour to pick cotton

JUNE 10 2016 (The Conway Bulletin) — Several international clothing brands, including German sportswear manufacturer Adidas, Hong Kong-listed Esprit, Sweden’s H&M and Britain’s Tesco, accused Turkmenistan’s President Kurbanguly Berdymukhamedov of presiding over a system that used forced labour to pick cotton.

The accusation shifts the focus of forced labour in Central Asia from Uzbekistan, which is already the subject of a ban imposed by most Western fashion labels, to neighbouring Turkmenistan, although campaigners have in the past also accused Kazakhstan and Tajikistan of the practice.

The system is a legacy of the Soviet Union when students, their teachers, doctors and other government workers headed out to the plantations for a few weeks in the harvest season to pick cotton.

“It has been widely reported that every year the Government of Turkmenistan forcibly mobilises tens of thousands of public-sector workers and farmers to cultivate and harvest cotton,” the letter read.

“We urge you to take urgent action to end forced labour in the cotton sector of Turkmenistan.”

The letter, published on May 25 by The Cotton Campaign lobby group, was later disseminated by Turkmen opposition websites (June 4). It mirrors other public actions taken by The Cotton Campaign against forced labour in the Uzbek cotton sector.

Sweden’s H&M, one of the biggest high street retailers in Europe, banned Turkmen cotton in December, two years after it imposed a ban on Uzbekistan.

The criticism will sting Turkmenistan. Cotton is its third biggest export, earning around $300m every year.

ENDS

(News report from Issue No. 284, published on June 10 2016)

FDI rises in Georgia

JUNE 9 2016 (The Conway Bulletin) — Foreign direct investment into Georgia in Q1 2016 measured $376m, roughly double the total of Q1 2015, the country’s statistics agency said. The communication and transport sector received the largest proportion of investments. The data suggests that Georgia’s economy is rebounding from a steep economic downturn last year that was triggered by a recession in Russia and a drop in oil prices.

ENDS

(News report from Issue No. 284, published on June 10 2016)

Azerbaijan’s energy company to build Malta gas power station

JUNE 5 2016 (The Conway Bulletin) — Azerbaijan’s state-owned energy company SOCAR said it will start building a gas-fired power station, fed by liquefied natural gas (LNG), in Malta by the end of year, ending years of delays for the project.

ElectroGas will build the 215MW LNG-to-power plant at the Delimara port, on the eastern Maltese coast, and will be its exclusive gas supplier. Switzerland-based SOCAR Trading, Germany’s Siemens and US-based General Electric own ElectroGas.

Media quoted SOCAR representatives as saying that “the facility will be commissioned before the end of the year.” They did not say how much it would cost to build, although Maltese media have speculated between $500m and $1b.

In effect the site is a large LNG terminal with a power plant attached. Malaysia’s Bumi Armada, an offshore services company, is building the $300m LNG storage facility at Delimara in Q3 2016. The floating terminal will have a capacity of around 95 tonnes of LNG.

Maltese media has repeatedly attacked the government for the delays in the commissioning of the power plant. Malta needs to boost its power generation capacity.

Earlier in 2015, Malta’s Auditor General launched an investigation into potential abuse of power by energy minister Konrad Mizzi, who had allegedly interfered in the purchase of fuel from SOCAR.

ENDS

(News report from Issue No. 284, published on June 10 2016)

Centerra sues Kyrgyzstan

BISHKEK, MAY 30 2016 (The Conway Bulletin) — Centerra Gold, the Toronto-listed company that owns the Kumtor gold mine in east Kyrgyzstan, lodged arbitration proceedings against the Kyrgyz government, pushing their already-strained relationship to breaking-point.

The company laid out three areas for its litigation challenge. It said it would challenge both an environmental claim against it and a charge by the Kyrgyz prosecutor that a $200m dividend paid in 2013 was illegal. Centerra also said it suspected that a delay in gaining official approval for its 2016 mining plan was designed to frustrate it for political reasons.

“The company will continue to contest all of the claims in international arbitration in accordance with the 2009 Restated Investment Agreement,” Centerra said in a statement.

It filed the arbitration case with the Stockholm Chamber of Commerce, a favoured destination for dispute resolution for projects in Central Asia. Earlier this year, the Stockholm court ruled in favour of an Estonian building company against the Kazakh foreign ministry.

Centerra’s reference to the 2009 agreement refers to the renegotiation of the contract. This boosted Kyrgyzstan’s share in Centerra to 32% from just under 16%. Centerra, in turn, fully owns the Kumtor Gold Company that operates the mine.

Kyrgyzstan is the largest share- holder in Centerra but has said that it wants to take a larger, more direct stake in the country’s biggest industrial unit.

And it appears to have been applying pressure on Centerra to force the issue. In March, Kyrgyz police raided the Kumtor Gold offices in Bishkek, looking for evidence of wrongdoing.

And a court in Bishkek has also been slapping down fines against Kumtor Gold over environmental damage and the government has delayed signing off on 2016 production plans.

This appears to be the start of a showdown in Kyrgyzstan’s mining sector. Once proceedings begin, lawyers and prosecutors, managers and ministers will confront each other in a legal battle that will ultimately decide control of the Kumtor mine and Kyrgyzstan’s economic output. Kumtor generates around a tenth of Kyrgyzstan’s GDP.

Investors also appeared to cheer the arbitration move by Centerra Gold’ pushing its share price up by 1.6% the day after the announcement to 6.86 Canadian dollars.

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(News report from Issue No. 283, published on June 3 2016)

Stock market: Centerra Gold

JUNE 3 2016 (The Conway Bulletin) — Centerra Gold shares in Toronto usually closely follow the ups and downs of spot gold prices, but a recent escalation of the spat with the Kyrgyz government has altered this trend.

Investors welcomed the strong verbal reaction by the company to a raid in a Centerra-owned office in Bishkek at the end of April and gave the stock a boost in the first weeks of May.

Since then, though, a number of environmental fines have dented confidence. It’s been a rocky ride with the share price bouncing around depending on the various statements issued by each side. At the start of the week, as this graph shows, Centerra’s share price rose on news that it would start arbitration proceedings against the Kyrgyz government.

Decreasing gold prices, as the graph shows, now add to the mix and with a legal battle with Kyrgyzstan on the horizon, analysts have become increasingly pessimistic on Centerra’s target price.

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(News report from Issue No. 283, published on June 3 2016)