The legal representatives of the government of Kazakhstan told EURACTIV that they believe the Central Asian country has the upper hand in the long-term legal battle surrounding what they call “one of the biggest frauds in the history of international arbitration.”
Since 2010, Kazakhstan has been engaged in a legal battle with the father-son teams of Moldovan and American businessmen, Anatolie and Gabriel Stati, who allegedly tried to use what the country said to profit from an arbitral award against Kazakhstan and falsify evidence.
The judgement of Robin Knowles, Judge of the High Court of the United Kingdom In June 2017, preliminary evidence of Statis fraud was mentioned.After Knowles’ judgment, Statis tried to dismiss an arbitration case in London in which they sought compensation from the government of Kazakhstan.
Statis is considered to be one of the richest people in Moldova. They run a network of hundreds of companies from all over the world.
Their company appeared in Panama documents, and a large amount of leaked financial information revealed the details of how the world’s wealthiest people use tax havens.
The U.S. District Court for the Southern District of New York accused Statis and one of its partners, Daniel Chapman, and his Argentem Creek group of using business activities in Kazakhstan as a cover for illegal activities.
They are accused of raising hundreds of millions of dollars by selling notes issued by their company Tristan Oil Ltd to third-party investors, allegedly for the two companies Kazpolmunay LLP (KPM) and Tolkynneftegaz LLP (TNG).
The process is believed to have divested assets from KPM and TNG.
Without knowing the key details of the Statis plan dating back at least to 2006, Kazakhstan terminated the contract between KPM and TNG and placed their subsoil use assets in trust management to prevent them from decay.
Statis subsequently filed an arbitration against Kazakhstan under the Energy Charter Treaty (ECT) supported by the European Union, and argued to the Swedish court that their business in Kazakhstan is a legal investment, and the state refused to give them “fair and just” treatment and owed them dozens of them. One hundred million U.S. dollars. US dollars.
As far as they are concerned, Statis stated that they are victims of long-term illegal activities in Kazakhstan. In 2013, the Swedish arbitral tribunal awarded them US$543 million in damages. Statis seeks compensation in excess of US$3 billion.
According to the Swedish court ruling, Statis initiated similar proceedings in the United Kingdom, the United States, Belgium, the Netherlands, Italy and Luxembourg, and claimed to have frozen more than $6 billion in Kazakhstan’s assets.
Kazakhstan stated that the documents originally provided by Stasis have been tampered with. Now, the country’s legal representatives say that new evidence discovered through foreign legal procedures initiated by the Kazakh government may make the case work in its favor.
Matthew Kirtland, a partner in the Washington office of Norton Rose Fullbright, a global law firm representing the government of Kazakhstan, told EURACTIV on Wednesday (June 16) that “After years of systematic lies by Statis and its accomplices,” Kazakhstan “is very happy. The truth is revealed”.
“KPMG withdrew all falsified audit reports of Stati’s financial statements in August 2019. This was a turning point in Kazakhstan’s search for justice. Now, Statis and their co-conspirators are facing the fact that they attempted to implement international arbitration throughout the history. One of the biggest fraud attempts is being exposed,” Kirtland said.
Kirtland said that evidence shows that Statis conducts activities by setting up various companies that claim to be third-party entities, but they secretly control these companies, use these companies to artificially inflate the costs of their Kazakh business, double billing for equipment, and Billing. For non-existent devices.
In April 2019, the former CFO of Statis testified under oath in the United States, claiming that Stati lied to KPMG when KPMG audited the financial statements.
In August of the same year, after reviewing the evidence and conducting its own independent investigation, it was reported that KPMG had withdrawn all audit reports used by Statis in various lawsuits.
KPMG is believed to have cancelled a total of 18 audit reports, covering three years of financial statements issued by companies controlled by Statis from 2007 to 2009.
EURACTIV contacted the KPMG office on Wednesday to request comment, but did not receive a response as of press time.
Kirtland added that another victory for Kazakhstan was in the same month, August 2019, when Kazakhstan obtained the Stati bank record from Latvia.
Almat Madaliyev, Deputy Minister of Justice of Kazakhstan, told EURACTIV that his country “will prevent large-scale abuse of the system designed to protect honest investors and will not give in to countries that try to escape one of the biggest frauds and their accomplices. In the Energy Charter. The history of the treaty”.
Madaliyev added that Kazakhstan is confident that “justice will be brought to the national government and its accomplices.”
EURACTIV requested the Energy Charter Treaty Secretariat to comment on the case, but did not receive a response before publication.