On April 6, the parliamentary commission for checking Kumtor summed up the results of its work. The commission was created on September 28, 2022 amid the revealed financial irregularities at Kumtor and the scandal with the sale in 2021 of 19.2 tons of gold worth more than $1 billion “to an unknown country”.
At a press conference on the results of the work, the head of the commission, deputy Arslanbek Maliev, said that the commission did not find any facts of theft, distortion of the quantity, quality and cost of stored, exported and sold gold in Kumtor.
And deputy Iskhak Masaliev, who initially headed this commission, in an interview with the New Faces publication, told how the deputies worked and what conclusions he drew from this audit.
According to Masaliev, he wanted to check the data announced by President Sadyr Japarov and the head of the Cabinet of Ministers Akylbek Japarov, who said that the country had accumulated 45 tons of gold in two years.
“Under Sooronbai Jeenbekov, there were 19 tons. In 2021, this gold was sold for $1.1 billion. And by May 2021, there was no gold in the bank. Today there are 45 tons. Therefore, I would minus 19 tons from there, which were before. I asked questions, but did not receive a clear answer. According to the report of the National Bank, according to the situation for the last year, the National Bank had no income in the amount corresponding to the cost of 45 tons of gold. This is under $3 billion. The National Bank did not have such extra money to buy gold,” Masaliev said.
The deputy said that the head of the National Bank Kubanychbek Bokontaev when asked how the gold was bought, he said that the regulator had money.
“I showed the report for 2021-2022. There they had a balance of about 80 million soms, but we are talking about 240 billion [сомов]. They didn’t have such an extra amount,” said Masaliev.
He suggested that the country printed money to buy gold.
“How else? If we did not sell gold abroad, there was no such volume of dollars. And since settlements in Kyrgyzstan are made in soms, the owner of the soms and their production is the National Bank. And maybe they printed the money. May be. They didn’t give me a clear answer either in writing or orally, ”he added.
Masaliev also said that he was told that the country does not sell gold, as a large supply of the precious metal makes the country attractive for investment. Another question that worried Masaliev was why the National Bank sold 19 tons of gold to Switzerland without publicly reporting it.
Masliev also spoke about the environmental consequences that arose due to gold mining at the mine. He recalled that Kyrgyzstan won against the Canadian Centerra Gold Inc. court for $3 billion for damages in the case of illegal storage of company waste on the Davydov and Lysy glaciers during the development of the field.
However, after Kumtor completely passed to Kyrgyzstan, the authorities of the country withdrew these claims and did not demand compensation.
“I asked the Minister of Ecology [Динару] Kutmanov why we dropped the claim. She replied that we used the lawsuit as leverage in the negotiations. That is, we won in our court in two instances, after which the Canadians became more accommodating and agreed to the conditions that Kyrgyzstan proposed,” the deputy said.
At the same time, the deputy stressed that the issue of ecology is only becoming more acute every year. According to him, the authorities of the country reported that there are about $50 million for the reclamation of the deposit.
“There is a little slyness here, for reclamation it is allocated at any mining enterprise. This is an integral part of the project, and they could not leave. Whether these funds will be enough is a big question. Therefore, we must leave more money for reclamation. And now, after Kumtor passed to Kyrgyzstan, there was an increase in the cost of work, there were more expenses,” Masaliev said.
The MP admitted that he was not satisfied with the answers received. Masaliev found out for himself that the President’s brother Sabyr Japarov did not sell Kyrgyz gold to Turkey. A photo of the president’s brother’s gold appeared online amid a scandal involving the sale of more than 19 tons of gold worth more than $1 billion.
The president later revealed that the picture was taken in 2021 in Turkey.
“There was only intention. This reassured me that the process was stopped voluntarily or against my will. This is good. And the president’s inner circle was not convicted of selling gold. That’s good too,” he added.
Masaliev shared information and how the meetings of the deputy commission on Kumtor were held. He said that he proposed to make the work open to the public, but the authorities encrypted all the documents under the heading for official use (CPD).
“I underestimated the government, I thought we would conduct, as expected, open public hearings with the invitation of outside experts. My proposal to invite independent experts was not accepted. We did not involve experts, we worked ourselves and the apparatus helped to collect information and documents. And first of all, they took information labeled chipboard, which Akylbek Zhaparov and Sadyr Nurgozhoevich publicly voiced in the media, but we received it in paper form under the label chipboard. […] I don’t know what they were afraid of,” Masaliev said.
The deputy also does not know why the head of the Cabinet of Ministers Akylbek Zhaparov did not begin to report that the country has 45 tons of gold, which could cover the external debt.
«But he was told that the external debt should not be closed, otherwise we would pay some kind of penalty. This is the know-how of our government for the first time I hear that the early payment of the debt will entail large costs. I think China would be happy if we paid some amount ahead of schedule. Well, this is the decision of the executive branch,” the parliamentarian added.
In the interview, Masaliev also spoke about the work of Tengiz Bolturuk, the former external manager of Kumtor, who is now under arrest in a case of corruption at the mine. The deputy believes that Bolturuk, who has Kyrgyz and Canadian citizenship, had no right to manage the company.
“It was a mistake to allow such a person to approach a strategically important object, to give him the opportunity to steer. My concern was justified. Now I am silent, and those who appointed him say that he failed. How can you manage to cause more than 1 billion soms of damage? […] Now he is in prison and makes statements in which it is not clear who he blames, stating that he, too, was framed. The President said that let him repair the damage and then he would be released. But this approach jars me – a person who stole a lot of money from the budget can pay and be free,” Masaliev said.
As an example, he cited the ex-head of Tazalyk, Ryspek Sarpashov, who was detained on the fact of corruption, misappropriation and embezzlement of entrusted property, as well as abuse of official position. After the arrest, he paid damages in the amount of 5 million 167 thousand soms and the court released him under house arrest.
«[…] And the people who expressed their opinion on Kempir-Abad are in prison for six months. Only once there was an interrogation, and that’s it. Perhaps the law does not fully work the same way. And I remember when we asked questions at first, when we let go [экс-замглавы таможни Райымбека] Matraimov and others, representatives of the president and the prosecutor’s office said that this was a gap in the legislation,” he said.
In an interview, Masaliev also explained the increase in salaries for public sector workers and social benefits. According to him, this was done due to the very sale of 19 tons of gold, which helped to hold out in the first half of 2021.
He added that about $600-$700 million was also taken from this amount for the further operation of the mine. Also, according to the deputy, the mine previously produced from 16 to 18 tons of gold per year, and now it has become about 14-15 tons. One of the reasons Masaliev called the rise in the cost of the process, since now the ore must be mined from underground.
The deputy does not deny that there are advantages for the country from the nationalization of the mine. However, questions still remain. According to Masaliev, while the mine was being developed by Centerra Gold Inc. The budget has received a fixed payment of $100 million since 2009.
“Over these two years, we have received a little more than $200 million. That is, the amount has not increased. But if we take it in total, then most of the money goes back to Kumtor for production, plus production has risen in price, which means more money is spent. The advantage is that there are gold reserves, and if they are sold, then there may be more pluses, ”he emphasized.