Kazakhstan turns up heat on Moldovan oligarch oil assets

By bne IntelliNews June 17, 2009

Graham Stack in Chisinau -

Kazakh authorities have brought criminal charges and tax claims against oil companies owned by the oppositional Moldovan oligarch Anatol Stati, in what appears to be a case of authoritarian rulers in the former Soviet bloc learning to cover each other's backs.

Moldovan President Vladimir Voronin's animosity towards the small country's richest man has long been known. But when the Moldovan press published last October an apparently leaked letter from Voronin to his Kazakh counterpart Nursultan Nazarbayev calling on the Kazakh authorities to crackdown on Stati's activities in the country, he was ridiculed for having overreached himself. It seemed far-fetched that the Kazakh authorities would heed a request from tiny Moldova to discriminate against a foreign investor.

Stati owns two smallish Kazakh oil and gas companies, KazPolMunai and Tolkynneftegaz, and claims to have invested half a billion dollars in the companies since acquiring them in 1999. The special purpose vehicle Tristan Oil was set up in 2006 to issue bonds on the back of the KazPolMunai and Tolkynneftegaz licences. Stati and his holding company Ascom also run operations in Turkmenistan, Kurdistan and South Sudan. It's a comparatively small setup, but for Moldova, Europe's poorest country and Ascom's historic base, it's big business - and that inevitably means politics.

"[Stati] runs and finances propagandistic campaigns and in non-transparent ways funds political parties in opposition to the current government," Voronin wrote in the alleged letter, which also accused Stati of engaging in sanctions-busting in Sudan.

Eight months on, no one is laughing any more at Voronin's bizarre letter, as Stati's Kazakh operations are facing existential threats from a united front of Kazakh regulatory authorities, including the Ministry of Energy and Mineral Resources, the Tax Committee, and economic crime investigatory units. "We have no doubt about the authenticity of the letter, although the allegations are ludicrous," Artur Lungu, vice president and CFO of Tristan Oil, tells bne. "It is no secret that relations between Mr. Stati and President Voronin are bad."

Stati has publicly denied he actively funds oppositional parties - although as a Moldovan citizen it would be entirely within his rights to do so. But the fact that Ascom deputy CEO Iurie Leanca decided to run for the opposition Liberal Democratic Party led by Vladimir Filat and another Ascom top manager, former deputy foreign minister Anatol Salaru, became deputy chairman of Moldova's Liberal Party led by Mihai Ghimpu and Dorin Chirtoaca, might have convinced Moldova's authorities otherwise.

Moreover, Stati's 33-year-old son playboy son Gabriel, a football club and nightclub owner in the Moldovan capital Chisinau and star of celebrity gossip columns, publicly called on Moldova's youth to vote against Voronin's Communists in the April parliamentary elections. Gabriel Stati is married to the daughter of opposition Democratic Party Chairman Dumitru Diacov. When mass protests disputing the election results turned violent on April 7, the Moldovan authorities immediately blamed the Statis for instigating the violence, and had Gabriel Stati extradited from Ukraine to Moldova, where he is now in jail awaiting trial.

Kazakh intrigue

However, for Stati's business interests, the worst blow had already been struck a good deal before the elections in faraway Kazakhstan. From late 2008 onwards, following Voronin's letter to Nazarbayev, a number of Kazakh agencies began targeting Tristan Oil's local subsidiaries in a style reminiscent of Russia's notorious attack on the country's then-largest oil company Yukos, which was owned by the renegade oligarch Mikhail Khodorkovsky.

First up was the Kazakh Ministry of Energy and Mineral Resources in December. Based on recent changes to legislation that entitled the government to break or change existing licence agreements, the energy ministry challenged Tristan Oil's licences, alleging it hadn't supplied all information to properly evaluate the fields in 2003.

The licence dispute with Tristan Oil was not unique, and a provisional agreement reached in March gave grounds for optimism. But hopes were dashed in May when other authorities turned up the heat. The Tax Committee and local economic crime investigators launched a double whammy of back tax claims totalling $31m coupled with trumped-up criminal charges, resulting in an assets freeze eerily reminiscent of the Yukos case in Russia. The criminal charges relate to company-operated pipelines that investigators suddenly decided should be reclassified as trunk pipelines that were operating without state permission. The mounting pressure culminated in the arrest of the CEO of Tristan's largest subsidiary Kazpolmunai, Moldovan citizen Sergiu Cornegru.

The escalation in May made it crystal clear that Tristan Oil was the target of a systematic campaign, according Lungu. "But we can only speculate about who is behind this," he says.

Besides the "Moldovan version", linked to the Stati-Voronin feud, there is also the "Kazakh version", according to Lungu. State-owned oil and gas national champion KazMunaiGas named Tristan Oil's operating companies as potential acquisition targets at a Merrill Lynch-hosted investment conference in April and is currently evaluating Tristan's operations, Lungu claims. "Both these versions have their merits," says Lungu. A Moldovan synthesis of the two is that Voronin's son Oleg is seeking an ownership stake in Stati's Kazakh companies in conjunction with KazMunaiGas. "We are definitely not expecting diplomatic support in Kazakhstan from the Moldovan authorities," Lungu says acidly.

Send comments to The Editor

Related Articles

Retail trade slows in Kazakhstan amid economic uncertainty

Naubet Bisenov in Almaty - A free-floating exchange regime for Kazakhstan’s currency, the tenge, is taking its toll on retail trade as the cost of imports rise. While prices have not changed ... more

bne:Chart - Russia begins to steady the ship according to latest Despair Index

Henry Kirby in London - Ukraine and Russia’s latest “Despair Index” scores suggest that the two struggling economies could finally be turning the corner, following nearly two years of steady ... more

New Kazakh central bank governor re-adopts free floating regime

bne IntelliNews -   The National Bank of Kazakhstan, the central bank, has re-adopted a free-floating exchange regime under the new governor, Daniyar Akishev, who has ... more

Register here to continue reading this article and 2 more for free or 12 months full access inc. Magazine and Weekly Newspaper for just $119/year.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

IntelliNews Pro subscribers click here

Thank you. Please complete your registration by confirming your email address. A confirmation email has been sent to the email address you provided.

Thank you for purchasing a bne IntelliNews subscription. We look forward to serving you as one of our paid subscribers. An email confirmation will be sent to the email address you have provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

IntelliNews Pro subscribers click here

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

Thank you. Please complete your registration by confirming your email address. The confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.