Comments on tax audit of JSC

RNS Number : 5255R

KazakhGold Group Ltd

24 August 2010

 



For immediate release

24 August 2010

An unscheduled tax audit of JSC Kazakhaltyn MMC for the periods 2009 and 2010 was commenced on 23 August 2010.  KazakhGold wishes to assert that its subsidiaries are fulfilling their tax obligations in full in accordance with the laws of the Republic of Kazakhstan.  Moreover, the company is undertaking actions to remedy breaches of tax regulations it believes were committed by the previous management of KazakhGold.  In particular, JSC Kazakhaltyn MMC has returned VAT that was previously illegally refunded, when the company was managed by members of the Assaubayev family, from the treasury of the Republic of Kazakhstan on the basis of sham contracts. The total amount of refunded VAT constituted approximately US$ 32 million, including approximately US$ 25 million in tax and $7 million in fines.  The Board of KazakhGold notes that earlier tax years, when the company was managed by the members of the Assaubayev family, are not subject to the current tax audit by the tax authorities of the Republic of Kazakhstan.

The company's management believes that the community surrounding JSC Kazakhaltyn MMC is being further destabilized by pressure being put on company employees. The general director of JSC Kazakhaltyn MMC, Alexey Teksler, stated: "We believe it is unacceptable to put unprecedented pressure to bear on those company employees who gave testimony at the legal proceedings in London. We noted that people who had nothing to do with the acquisition of KazakhGold have undergone debriefings lasting hours, and have had to endure threatening phone calls and demands to retract their testimony on violations of the law by the previous management of the company. We will be taking all necessary actions to protect the company and its employees from any unlawful encroachment," said Mr. Teksler.

Enquiries:

KazakhGold Alexey V. Chernushkin, Director, Capital Markets and IR

[phone]

 

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