Gold Lion Holdings

Gold Lion Holdings, according to a statement issued by KazakhGold Group Ltd - which is listed on the London Stock Exchange - on 15 November 2007 was then “wholly-owned by RBC Trustees (CI) Limited as trustee of The ABM SK Trust, a Jersey discretionary trust whose only named beneficiaries are members of the Assaubayev family, members of which are on the Board of KazakhGold”. RBC Trustees is part of the RBC Group (qv).

The family’s shares in the company diminished somewhat afterwards, but overall control remained until mid-2009, when Gold Lion loaned KazakGold US$9.4 million to repay a Euroloan debt [MJ 12 June 2009].

In May 2009, Trading Markets.com remarked that “KazakhGold goes back in history to the dark days of Stalin's collectivization wave which swept through Kazakhstan from 1928... Today it is under control of a Kazakh family by the name of Assaubayev, headed by clan-leader Kanat Assaubayev. An overwhelming majority of the members of the board consists of his relatives… Most of the Assaubayevs have degrees in both engineering and economics, which explains how they could make the enterprise survive.” [Trading Markets.com, 14 May 2009].

However, shortly afterwards, Polyus Gold (a spin-off from Norilsk Nickel itself) acquired a majority 50.1% stake in Kazakhgold from the Assaubayev family.

Polyus and affiliates filed a lawsuit in London on June 25 2009 against members of the Assaubayev family, who are the former directors of KazakhGold, Gold Lion Holdings Ltd. and Hawkinson Capital Inc., seeking damages of more than $450 million over allegations they misappropriated funds and misrepresented output and profit figures from 2006 to 2008.

In July 2010, the new board of Kazakhgold accused the Assaubayev's of taking fraudulent actions during their time in tenure of the company. This provoked a counter-accusation by the Assaubayev's that they themselves had been fraudulently deprived of US$187 million, when a wholly-owned subsidiary of Polyus, called Jennington International Inc (registered in the British Virgin Islands' tax-haven) apparently secured its ruling stake in Kazakhgold in 2009.

The same month, Kazakhstan’s Industry Ministry announced that it had annulled its previous approval of Polyus’s 2009 acquisition and ruled out the sale of additional shares by KazakhGold as part of the reverse takeover [Bloomberg, 16 July 2010].

Bloomberg News service commented at the time that:

"The dispute over KazakhGold may thwart the plans of Russian billionaires Mikhail Prokhorov and Suleiman Kerimov to transform Moscow-based Polyus into a U.K.-listed company, a step towards a merger with a global mining company, according to VTB Capital. KazakhGold, registered in Jersey and with a primary listing in London, said in June it intends to acquire its parent Polyus in a so-called reverse takeover".

Although Kazakhgold and the Assaubayev's were still locked in conflict by November 2010, they were reported to be holding "discussions" with each other [MJ 19 November 2010].

Finally (though is anything "final" in post Soviet financial politics?) the charges against the Assaubayev's were dropped in December 2010, and the family - through its Altyn Group investment company - agreed to pay US$260 million to acquire 51% of Polyus.

As the Mining Journal put it, this "would clear the way for Polyus to reverse into Kazakhgold,[thus] giving it a primary listing in London" [MJ 15 April 2011].

In July 2011, Polyus announced a plan to make a primary listing on the London Stock Exchange by July 25th [MJ 8 July 2011] - a plan which has not yet materialised.

Then, in April 2012, Polyus announced that it had agreed to sell a 100% interest in its Romaltyn mining and exploration firms, for US20 million, to a company affilited with the Kazkh conglomerate, SAT & Co [MJ 27 April 2012].