JAN. 20 2016, BISHKEK (The Conway Bulletin) — Kyrgyz police raided the China-run Junda oil refinery in the north of the country and accused it of evading 54.5m som ($716,000) in taxes, charges that will strain Kyrgyzstan-China relations.
During the raid, police detained the company’s deputy director Lin Yu-shan and placed its accountant, Lyudmila Marchenko, under house arrest.
Baktybek Ashirov, head of the Kyrgyz state service for combating economic crimes, told Parliament that the Junda refinery had paid 30m som ($400,000) in taxes but that was far below what it should have paid.
“The inspections showed that they should have paid twice as much, that is, there was hiding of information and an underestimation of production,” he was quoted as saying by local media.
Junda hasn’t commented.
For foreign investors in Kyrgyzstan, the charges are a worry. They have previously complained that local elite and the authorities have colluded to pressure various businesses into paying more tax, fines or giving up equity stakes in projects.
And the Junda refinery, built by the China Petrol Company for $430m, has seemingly had to deal with a large dose of misfortune since opening in January 2014.
First, protests by locals complaining of poor air quality forced it to stop production, then crude oil supplies dropped so low that it had to limit output.
The authorities said that despite the raid and the arrests, the Junda oil refinery, one of two in Kyrgyzstan, was operating as normal.
