BISHKEK (KazTAG) — The $3 bln fine allows Kyrgyzstan to strengthen its control over Kumtor Gold Company, said Ali Sagyndykov, analyst of Eurasian Capital JSC.

Commenting on the situation, Sagyndykov suggested:

The announcement of the fine has already led to a drop in shares of Centerra Gold Inc. on the Toronto and New York stock exchanges, which gives Kyrgyzstan the opportunity to buy up these shares and increase its controlling stake, consolidating control and then allow the company to appeal the fine and not interfere much.

According to the expert, Kumtor accounts for up to 10% of Kyrgyzstan’s GDP and is one of the country’s largest enterprises. The fine of more than $3 bln may be unaffordable for the company:

This amount corresponds to the size of the total assets of the holder - Centerra Gold Inc. At the same time, the largest shareholder of Centerra Gold Inc. is Kyrgyzstan itself. At the moment, Kyrgyzstan, through the fully state-owned Kyrgyzaltyn OJSC, owns 32.96% of Centerra Gold Inc. shares, if we believe the information on the Kyrgyzaltyn website.

On May 11 it was reported that after the issuance of fines the vice-presidents of Kumtor Gold Company, most of the middle managers, as well as ordinary employees — expatriates, foreign workers left Kyrgyzstan. The president of the company, Deon Badenhorst, who intends to return to Kyrgyzstan from a planned trip in a few days, also is currently forced to be abroad.