In Bishkek, three politicians were arrested at once in a corruption case at different stages of the implementation of the project to develop the largest gold deposit in the republic – Kumtor. Former Prime Minister Omurbek Babanov, ex-speaker of Parliament Asylbek Jeenbekov, and deputy Torobay Zulpukarov were detained.
Asylbek Jeenbekov, who is the brother of ex-President Sooronbai Jeenbekov, as well as deputy Torobay Zulpukarov, received a notice of suspicion under the article “Corruption” of the Criminal Code of the Kyrgyz Republic. It’s known that Torobay Zulpukarov is also charged with illegal enrichment.
The interdepartmental investigative group from among the investigators of the State Committee for National Security, the Prosecutor General’s Office and the Ministry of Internal Affairs, in connection with the investigation of corruption in the conclusion of agreements with the Canadian company Centerra Gold Inc., which owns Kumtor Gold Company, which in turn develops Kumtor deposit, has already interrogated former Prime Minister Temir Sariev, as well as former MPs Tursuntai Salimov and Sergei Ibragimov.
It’s known that Ibragimov was interrogated because of the agreement of 2009 with Centerra Gold. Then Sergei Ibragimov was a member of Parliament from the party “Ak Zhol”. It’s curious that after the interrogation, Ibragimov, as reported by the State Committee for National Security, “voluntarily transferred 100 million KGS to the treasury”. Though, the Department explained that the former deputy made this generous gesture not within the framework of the criminal case concerning Kumtor.
On May 7, 2020, the Oktyabrsky District Court decided to recover from the gold mining company Kumtor Gold Company $ 3.1 billion (261.7 billion KGS) in favor of the state, as well as $ 15.6 million (1.3 billion KGS) of the state duty. In total, the company is obliged to pay 263 billion KGS, at the current exchange rate this is $ 3.1 billion.
Four citizens of the Kyrgyz Republic Aybek Sarybaev, Nariste Kalchaev, Kemelbek Kutmanov and Ablas Jeenbekov filed a lawsuit against the company, demanding to declare illegal the storage of the company’s waste products on Davydov and Lysy glaciers during the development of Kumtor gold deposit in Kyrgyzstan. The first two were charged several years ago with hostage-taking and organizing riots in Karakol in the same case as the President Sadyr Japarov. The third plaintiff, Kemelbek Kutmanov, according to local media reports, is the son of Dinara Kutmanova, the chairman of the State Committee for Ecology and Climate. The same agency acted as a third party in the suit against Kumtor.
Aybek Sarybaev was also tried and sentenced by the Pervomaisky District Court of Bishkek to 8 years in a maximum security colony in the case of the riots on October 7, 2013. He was charged under the articles “Hostage-taking”, “Hooliganism”, “Threat of murder”, “Use of violence against a government official”, “Robbery” and “Unlawful deprivation of liberty”.
Almost immediately after the court’s decision, the shares of Centerra Gold Inc., of which Kumtor Gold Company is a part, fell 30 %. The company called the claims of the applicants unfounded and stated that in 2017 the Kyrgyz government entered into a Strategic Agreement on Environmental Protection and Investment Development, which provided for the company to be exempted from all outstanding claims, including compensation for environmental damage resulting from the disposal of waste on glaciers.
Ten days after the resonant court decision on the citizens’ claim against Kumtor, on May 17, the Parliament heard the report of the State Commission headed by the brother of the incumbent President, MP Akylbek Japarov, on checking the activities of Kumtor company. As a result of the audit, the members of the Commission proposed to recover almost $ 5.5 billion (460 billion KGS) from the company.
The Parliament instructed the Cabinet of Ministers to temporarily introduce external management in Kumtor Gold Company. The President Sadyr Japarov signed a corresponding decree and the very next day Tengiz Bolturuk was appointed external manager.
On the same day, at an extraordinary session of Parliament, the chairman of the State Committee for National Security, Kamchibek Tashiev, said that the Department had four criminal cases related to Kumtor deposit.
“One of them is about the allocation of additional land plots for the company, where the former Prime Minister Mukhammedkaly Abylgaziev passes (currently he is in custody in the pre-trial detention center of the SCNS in a case not related to Kumtor – author). There is a case on the accrual of tax deductions and violation of the rules for the circulation of hazardous substances, and air pollution,” Kamchibek Tashiev said.
According to him, one criminal case was opened against the company’s top official.
“We will consider the responsibility of all officials who signed the agreement. We also have something to do with the deputies who receive support from Kumtor. These are not unfounded accusations, these are specific criminal cases with specific charges,” the head of the State Committee for National Security said.
Centerra Gold Inc. stated that it regards the actions and decisions of the authorities of Kyrgyzstan regarding Kumtor as an attempt to justify the initiative to nationalize the deposit or force the company to abandon the deposit. On May 16, it became known that a Canadian investor initiated an arbitration proceeding against the government of the Kyrgyz Republic. The company also announced that it had banned Kyrgyzaltyn from operations with its shares in Centerra Gold Inc. On May 20, the company announced the capture of Kumtor deposit and filed a lawsuit against Tengiz Bolturuk.
Kumtor is the largest gold deposit in Kyrgyzstan. The first agreement on its development was concluded in 1992 with the Canadian company Cameco. Then the share of Kyrgyzstan in the gold mining enterprise amounted to 67 % of the shares.
However, in 2003, the government of Nikolai Tanaev, without the permission of the Parliament, entered into an agreement with Cameco to create a subsidiary company Centerra Gold, the share of the Kyrgyz Republic in which fell to 33 %. Then his consent to this deal, in addition to Tanaev, was also given by a member of the board of directors of Cameco, the President’s son Aydar Akaev. Akylbek Japarov, the chairman of the Parliamentary State Commission on the issue of Kumtor, said that for this transformation, the Canadian Cameco gave a large bribe to the family of Akaev in 2003 – it donated money and shares on the stock exchange of Toronto worth almost $ 45 million.
Under President Kurmanbek Bakiyev in 2009, a new agreement was concluded with the Canadian company (the negotiations were conducted by the President’s second son, the head of the Central Agency for Development, Investment and Innovation, Maxim Bakiyev, and Alexei Eliseev – author). Under the new agreement, the share of Kyrgyzstan in Centerra increased from 16 % to 33 %, and tax payments were also increased.
As it turned out later, the share of Kyrgyzstan was increased by providing additional 16,330 hectares for gold development, including part of Sarychat-Ertash reserve.
In the same year, the agreement with Centerra acquired the status of an international treaty after being consolidated by Parliament.
The decision of the government of Daniyar Usenov on the allocation of 16,330 hectares was canceled by decisions of the government of Omurbek Babanov and the Parliament in 2012.
In 2017, at the last moment of his presidential career, Almazbek Atambaev signed the Law “On amendments to the Water Code of the Kyrgyz Republic”, according to which Kumtor was allowed to develop on two glaciers. According to the law, amendments were made to the articles 62 and 67 of the Water Code, providing for the exclusion of Davydov and Lysy glaciers from the ban for mining activities that may affect the state of glaciers.
The amendments to the Water Code of the Kyrgyz Republic, adopted by Jogorku Kenesh [Parliament], were then challenged by human rights activists. They filed a lawsuit to invalidate the resolution of JK KR on the adoption of the Law of the KR “On amendments to the Water Code of the Kyrgyz Republic”. The public association “Coalition for democracy and civil society” stated that the reason for going to court was serious violations committed during the voting on the draft law in the third reading. In particular, the fact that the voting began without a quorum, and the deputies present voted for those absent.
In the same 2017, the government of Sapar Isakov signed a Strategic Agreement with Centerra Gold, which implies the preservation of the concession agreement of 2009 and mutual waiver of claims. However, because of Isakov’s resignation, the agreement didn’t gain force.
Later, the Cabinet of Ministers of Mukhammedkaly Abylgaziev recognized the last agreement as not meeting the interests of Kyrgyzstan, but after bilateral negotiations in 2019 he nevertheless signed it. The agreement upheld the agreement of 2009, in which the Kyrgyz side waived environmental claims and Centerra paid Kyrgyzstan an additional $ 150 million.