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Georgia MPs allow PM to stand in parliamentary vote

TBILISI, JUNE 22 2016 (The Conway Bulletin) — Georgian MPs voted to modify the election code to allow the PM to run for parliamentary elections without having to resign, a major blow to the opposition’s calls for separation of powers.

The bill, which included other technicalities, such as free airtime for parties, was approved with a 79-1 majority.

The defenders of the bill said that it is constitutionally illogical to be left without a government during an election campaign, or to have to form an interim government, if the PM was forced to resign to run for MP.

“To have to form a new government, which could change completely within two months, just before a parliamentary election is not appropriate for the stability of a con- constitutional system,” Vakhtang Khmaladze, MP for the Georgian Dream, said as he presented the bill.

Georgia’s President Giorgi Margvelashvili will have to sign the bill before it enters into force.

The Georgian Dream coalition, although showing cracks as the election campaign builds up, voted en masse to back the proposal, which will allow PM Giorgi Kvirikashvili to run for MP without having to resign.

On Oct. 8, Georgia will vote to elect a new Parliament. The opposing factions are already gearing up to what analysts have said will be a heated political campaign, fought between two deeply opposed sides.

ENDS

(News report from Issue No. 286, published on June 24 2016)

Kyrgyz MPs pass media bill

BISHKEK, JUNE 22 2016 (The Conway Bulletin) — Kyrgyzstan’s parliament passed the first reading of a law that will restrict foreign funding of TV channels, a move its proponents have said is vital to protect media integrity but its detractors have said limits freedom.

The bill, which will have to be passed two more times, cuts the share of foreign financing for mass media outlets down to 35% and prohibits any foreign parties from establishing TV channels in Kyrgyzstan.

Media reported that the bill had been passed by 79 votes to 30.

Medet Tiulegenov, a political studies expert, said that the bill may have been pushed through by MPs to feed off popular mistrust of foreigners and boost their profile.

“By promoting a law against foreign investments in local media, MPs are trying to listen to that part of the population, which blames foreigners for problems here,” he said. “There are many MPs, who are not well-known among the population yet, but would like to get attention and popularity.”

This is the second major stand-off in Kyrgyzstan this year between groups of conservative, nationalist MPs and rights campaigners. Earlier this year, at the final reading, parliament rejected a bill that would have banned NGOs from directly receiving foreign funding.

Critics of the bill have said that its main aim was to close down the local office of the US-funded Radio Free Europe/Radio Liberty.

Begaim Usenova, a Kyrgyz media expert, said that this law is another attempt to restrict people’s freedom. “It is incorrect to say that foreign funded media sources are a threat to the state, the bill’s initiators could not prove that there has ever been such a case,” she said.

And the bill appears to have already been watered down after protests by a few dozen people in front of parliament. Restrictions on foreign funding of media were reduced to just TV, rather than including print and radio too.

Still, the bill does carry a degree of popular support in Kyrgyzstan.

Yulia, 33, a Bishkek resident, said: “This is a good law, as every foreigner has its own interests, whereas we have to care about our security.”

And Dauren, 30, another Bishkek resident, said: “I am happy that there are more Kyrgyz patriots in our parliament than western lobbyists.”

ENDS

(News report from Issue No. 286, published on June 24 2016)

GM- Uzbekistan woes worsen

JUNE 23 2016 (The Conway Bulletin) – Rustam Radjabov, the new director of the GM-Uzbekistan joint venture, was detained by police and held in jail since the end of May on embezzlement charges, RFE/RL reported quoting sources in the company. Mr Radjabov replaced Tokhirjon Jalilov who was arrested in April for masterminding a criminal scheme over car exports to Russia. The Uzbek authorities have not confirmed the arrest. The anonymous source also said operations at the GM Uzbekistan plant are “practically suspended.” GM Uzbekistan is one of the country’s most important factories.

ENDS

(News report from Issue No. 286, published on June 24 2016)

Kazakhstan’s Kazmunaigas wants to gain more control of KMG EP

ALMATY, JUNE 17 2016 (The Conway Bulletin) — Kazmunaigas, Kazakhstan’s state-owned energy company, said it wants to change the shareholder’s agreement at its London-listed subsidiary KMG EP, a move that independent directors said would weaken the company.

Kazmunaigas, which owns 57.9% of KMG EP, released a note that called for an extraordinary general meeting in August, that would change the terms in the so-called relationship agreement, a document that was prepared in 2006, when KMG EP listed its global depository receipts in London.

Analysts have said that Kazmunaigas, which has been hit by low oil prices, may be looking to gain more control of KMG EP, which has performed better than its state-owned parent. By securing more shares and improved terms, Kazmunaigas would also strengthen its position ahead of a prospective IPO in the next few years.

But independent directors at KMG EP immediately lined up to voice their concerns about Kazmunaigas’ plans. They also said that they would resign if they were passed.

“[We] strongly recommend that all Independent Shareholders vote against the Resolutions proposed by NC KMG,” three of the four independent directors on the board of KMG EP said in a joint statement.

The directors also said the new document will “significantly weaken” independent voices in the company’s decision-making processes and the Kazmunaigas offer of $7.88/GDR to minority shareholders “significantly undervalues” KMG EP.

Kazmunaigas said a new deal would improve efficiencies at KMG EP.

And the row looks to be getting more bitter. Kazmunaigas chairman Sauat Mynbayev also said the KMG EP share price could fall by one-third to around $5/GDR if investors didn’t go along with the plan.

“I don’t think the stock price will jump, in fact, if the shareholders decide to go against our plan, it could fall to, say $5/share,” he said.

In effect, the government sent a strong signal to shareholders that it wants to increase control over KMG EP.

If shareholders choose to go against the plan, a bitter battle for control looms.

ENDS

(News report from Issue No. 286, published on June 24 2016)

Stock market: KMG EP

JUNE 23 2016 (The Conway Bulletin) – The price of KMG EP’s global depository receipts (GDRs) in London has not moved much in the past week, despite the dispute between its owner, Kazakhstan’s Kazmunaigas, and its independent directors.

KMG EP is the upstream branch of the Kazakh state-owned oil and gas company. It listed its GDRs in London after an IPO in 2006. The closing price on Thursday was $7.24/GDR, which follows a trend that since mid- May has pushed KMG EP’s GDRs above the $7 benchmark.

Despite low oil prices and decreasing export volumes, KMG EP has managed to perform well in the first quarter of the year, due to the sharp depreciation of the tenge against the US dollar. A weaker tenge helped KMG EP offset domestic costs and increase the value of its exports, denominated in US dollars, despite the plunge in global prices.

ENDS

(News report from Issue No. 286, published on June 24 2016)

Armenians criticise tax revamp

JUNE 22 2016 (The Conway Bulletin) – Political and institutional figures have harshly criticised a new tax code that parliament approved last week during the first reading of the bill. Mans Tandilyan, a high-ranking member of the Lusavor Hayastan party, said the new code will negatively affect small and medium businesses. Tigran Jrbashyan, president of the American Chamber of Commerce in Armenia, warned that, if passed, the law would send Armenia into a recession. The new tax law, approved on June 15, will increase excise taxes on fuel, tobacco and alcohol and increase income tax.

ENDS

(News report from Issue No. 286, published on June 24 2016)

McDonald’s finally opens in Kazakh city

ALMATY, JUNE 10 2016 (The Conway Bulletin) — To much excitement, and a little controversy, McDonald’s opened its first restaurant in Almaty, Kazakhstan’s biggest city.

This is the second McDonald’s in Kazakhstan after a restaurant it opened in Astana in March.

At the opening on the site of an old cinema which heritage activists had campaigned to try and protect, Kairat Boranbayev, owner of the McDonald’s franchise in Kazakhstan and Belarus, said that the company aimed to build a total of 15 stores in Almaty and 10 in Astana.

The long-awaited opening of the McDonald’s restaurants has been one of the few positives for President Nursultan Nazarbayev this year, marked by a sharp drop in Kazakhstan’s economic outlook because of a recession in Russia and a fall in oil prices. Ordinary Kazakhs have seen inflation rise, jobs disappear and tenge savings wiped out.

ENDS

(News report from Issue No. 285, published on June 17 2016)

Kazakhstan’s oil output falls

JUNE 13 2016 (The Conway Bulletin) – Kazakhstan’s oil output fell by 7% to 1.5m barrels/day in April compared to the same period in 2015, the Organisation of Petroleum Exporting Countries (OPEC) said in a monthly report. Kazakhstan’s Statistics Committee said total oil production shrank by 2.8% in Jan.-May 2016, to 27.7m tonnes, compared to the same period in 2015.

ENDS

(News report from Issue No. 285, published on June 17 2016)

Azerbaijan’s Pasha issues Eurobond

JUNE 16 2016 (The Conway Bulletin) – Pasha Bank, one of the largest banks in Azerbaijan, said it will launch a $200m Eurobond issue in the second half of the year. The bank expects yields of around 5%, Ivan Uglyanitsa, head of investment banking, told Reuters. Azerbaijan’s sovereign debt gives a yield of around 3.5% currently.

ENDS

(News report from Issue No. 285, published on June 17 2016)

Polymetal gets loan for its Kazakh project

JUNE 15 2016 (The Conway Bulletin) – Russian miner Polymetal said it reached an agreement with Sberbank for a $350m loan to finance the start-up of its Kyzyl project in north-eastern Kazakhstan. In 2015, it bought the Kyzyl project for $620m from Sumeru, a private group owned by Timur Kulibayev, son-in-law of Kazakh President Nursultan Nazarbayev.

ENDS

(News report from Issue No. 285, published on June 17 2016)