fbpx

Uzbekistan Takes a Hostage in Foreign Investment Dispute

As noted in earlier posts on this blog, Amsterdam & Peroff LLP acts on behalf of Oxus Gold Plc, formerly one of Uzbekistan’s biggest foreign investors whose assets came under attack by the state.  After months of threats, harassment, and terrorizing of the company by the tax authorities, a military court has tried and sentenced an Oxus employee, Said Ashurov, to 12 years in prison on patently absurd charges of “espionage.”  The case serves as an ugly reminder how hostage taking has become a regular feature of state theft in the CIS, and we certainly hope that cooler heads will prevail in Tashkent to put an end to this worsening crisis.

The Telegraph has the story:

A lawyer acting for Oxus Gold, the London-based mining company, described Said Ashurov’s conviction as a fabrication and said that the Uzbek government was using him as a pawn in their battle to take control of a lucrative gold field in the Central Asian country.

“It’s part of a general smear campaign,” Robert Amsterdam, the Oxus Gold lawyer, told the Daily Telegraph before the verdict in a telephone interview.

“A witness has come to us and said that he’d been threatened if he didn’t give a false testimony, which is fairly standard in Uzbekistan.”

The Uzbek Foreign Ministry was not available for comment.

The verdict was given on Wednesday, according to a statement from Oxus Gold on Thursday. It is not clear which country Ashurov, who is an ethnic Tajik, was accused of spying for.

The row between Oxus Gold and the Uzbek government over control of the gold mine has already forced the mining company to de-list from the London Stock Exchange’s Alternative Investment Market. Mr Amsterdam has said the company had once been valued at about £245 million.

Human rights groups accuse Uzbekistan of abuse and its prisons are notoriously dangerous. Tuberculosis and pneumonia are rampant in Uzbek prisons, which are squalid and dirty.

Ashurov, 46, is ill with Hepatitis B, an illness that could kill him without the proper medical care.

“Even for healthy people, Uzbek jails are deadly,” Mr Amsterdam said.

“Our understanding is that his health is greatly deteriorating and that he could die if he is not given the correct medical treatment.”

He also said that since being detained, Ashurov has developed pneumonia and complained of an intense pain in his liver.

Uzbek border guards arrested Ashurov on March 5 as he tried to cross the border into Tajikistan. Mr Amsterdam, who previously acted as part of the defence team for Russian oligarch Mikhail Khodorkovsky against charges of financial fraud, said that Ashurov’s family live in Tajikistan and that it was only natural he should visit them.

Oxus Gold has been working in Uzbekistan since 1996. The company’s row with the Uzbek government focuses on ownership of the Amantaytau Goldfields JV which mines for gold in the Kyzylkum desert in central Uzbekistan.

Oxus Gold owns a 50 percent stake in the Amantaytau Goldfields JV with the Uzbek government but after months of pressure and an audit by the authorities, it was forced to end operations in March. Since then Uzbekistan has also accused Oxus Gold of breaking environmental regulations, not investing in new technology and putting workers’ lives at risk.

Mr Amsterdam has described the allegations as a campaign to discredit the company. In July, Oxus Gold was forced to give up its listing on the London Stock Exchange’s Alternative Investment Market because it was unable to file its 2010 financial results.

Oxus Gold has launched international arbitration proceedings and a PR campaign against the Uzbek government.