08ASTANA363, CORRUPTION CHARGES BROUGHT AGAINST MINISTRY OF

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Reference ID Created Released Classification Origin
08ASTANA363 2008-02-22 10:28 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO4634
PP RUEHLN RUEHVK RUEHYG
DE RUEHTA #0363 0531028
ZNR UUUUU ZZH
P 221028Z FEB 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 1830
INFO RUCNCIS/CIS COLLECTIVE 0407
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS ASTANA 000363 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EEB 
 
E.O. 12958: N/A 
TAGS: PGOV PREL EPET KZ
SUBJECT: CORRUPTION CHARGES BROUGHT AGAINST MINISTRY OF 
ENERGY OFFICIALS 
 
 
1. (SBU) On February 18 Kazakhstan's financial police brought 
criminal charges against a group of officials at the Ministry 
of Energy and Mineral Resources (MEMR).  The officials, who 
have not yet been publicly identified, were charged with 
misfeasance and corruption.  According to a press release, 
the officials failed to act and deliberately omitted facts to 
the benefit and advantage of one foreign company, also 
unnnamed.  The officials allegedly caused 40.9 billion tenge 
($340.3 million) worth of damages in the form of unpaid 
budget taxes. 
 
2. (SBU) In a brief television interview, Minister of Energy 
and Mineral Resources Saut Mynbayev said that he is unable to 
comment on the case and does not know which officials have 
been charged. 
 
3. (SBU) According to television channel KTK, the foreign 
company involved is likely JSC Karazhanbasmunay, currently 
developing oil fields in the Mangistau province.  CITIC Group 
of China partially owns the company, after acquiring a 94.62% 
stake in Karazhanbasmunay from Canada's Nations Energy in 
2006.  In 2007, KazMuniaGas Exploration and Production (EP 
KMG) purchased a 50% stake from CITIC. 
 
4. (SBU) In January 2008, the financial police accused the 
former shareholders of JSC KarazhansbayMunay of failure to 
pay 41 billion tenge of taxes on the increased share value 
that resulted from the purchase of a 50% stake by EP KMG. 
 
5. (SBU) Comment: Although Kazakhstani authorities have not 
yet named the foreign company linked to corruption at MEMR, 
CITIC is almost certainly the company involved.  Minister 
Mynbayev's public admission that he does not know which 
officials were charged also raises questions about the 
strength of his position.   End Comment. 
ORDWAY

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