Kyrgyzstan denounces Centerra directors, withholds votes again – by Peter Koven (Financial Post – May 18, 2016)

TORONTO — One of Centerra Gold Inc.’s Kyrgyz directors denounced the company at its annual meeting on Tuesday, saying there is “urgent need” for change at the management and board level.

“There are fundamental breaches of trust between Centerra and the government of the Kyrgyz Republic, which has led to instability of the Kumtor project,” Bektur Sagynov, deputy chairman at Kyrgyzaltyn JSC, told shareholders at the meeting in Toronto.

State-owned Kyrgyzaltyn, which controls 32 per cent of Centerra shares, also withheld votes for all of the gold miner’s non-Kyrgyz directors for the second straight year. It withheld votes on some directors in prior years.

The voting results ultimately did not matter, as the directors were all re-elected easily. But they highlighted how chaotic Centerra’s situation has become in Kyrgyzstan, a country that the Fraser Institute consistently ranks as one of the least stable mining locales on earth.

“It’s not viewed as a top-tier jurisdiction,” Centerra chief executive Scott Perry acknowledged at the meeting. Last month, the company’s Bishkek office was raided by law enforcement agencies. They were seeking documents related to an apparent criminal investigation involving inter-corporate transactions.

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