Just weeks before the planned creation of a new gold company on the London Stock Exchange this month, the authorities in Kazakhstan’s capital, Astana, threw a spanner in the works with the announcement of an investigation into the activities of the former management of KazakhGold and the cancellation of a planned share sale.
The news came just weeks before LSE-listed KazakhGold was supposed to finalize a reverse takeover – whereby KazakhGold with a market capitalization of about $300 million would have taken over its Russian parent company Polyus Gold, which is valued at least 30 times higher – in mid-August to create a $10.8 billion group and the largest pure gold miner on the London bourse.
The background to the move is seen as dissatisfaction with the price at which Polyus Gold acquired its stake, following the Kazakh government’s decision to waive its pre-emptive right to buy...
