http://business.financialpost.com/
TORONTO — The dispute between Centerra Gold Inc. and Kyrgyzstan has escalated to disturbing levels, with the Kyrgyz launching a new criminal probe and barring several of the miner’s employees from leaving the country.
The move is the latest salvo in an ongoing cat-and-mouse battle involving the prized Kumtor gold mine. Toronto-based Centerra raised the stakes a week ago when it launched an international arbitration case against the Kyrgyz government, and the state is now answering with force.
“Retaliation by Kyrgyz authorities is not unexpected, but suggests that a negotiated settlement, as achieved in previous disputes, may be unattainable,” BMO Capital Markets analyst Andrew Breichmanas said in a note, which he titled “Well, That Escalated Quickly.”
Centerra announced Monday that the Kyrgyz general prosecutor’s office has launched a criminal case over allegations that certain company managers abused their authority and engaged in commercial transactions that harmed the state. Centerra’s office in Bishkek, the capital of Kyrgyzstan, was raided and documents were seized for the second time since April. The company has denied any wrongdoing.
The individuals under investigation were not named, but Centerra noted that “several” of its top expat managers in Kyrgyzstan have been barred from leaving the country. “We haven’t been provided a list (of who is under investigation),” said John Pearson, Centerra’s vice-president of investor relations.
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