Ascom S.A. (the "Company") today announced that in connection with the tax assessment imposed by the Tax Committee of the Ministry of Finance (the "TCMF") against Kazpolmunay LLP ("KPM") and Tolkynneftegaz LLP ("TNG"), which was challenged by KPM and TNG in the Specialized Inter-district Economic Court of Astana (the "CIECA"), on September 8 and September 9, 2009, the CIECA ruled against KPM and TNG and found that the tax assessment had been properly imposed. KPM and TNG appealed the ruling in the Civil Collegium of Astana Court (the "CCAC") which on October 28, 2009 cancelled the decision of the CIECA and sent the matter back down to the CIECA for a renewed review and hearing. The CCAC ruled that the judges who previously ruled on this matter at the CIECA should not hear that matter again and that a different set of judges should preside.
As previously indicated, KPM and TNG strongly believe that the TCMF tax assessment violates Kazakhstan law, and they will continue to dispute the TCMF tax assessment in the local Kazakh courts.
In connection with the ongoing criminal investigation initiated by the Agency for Fighting Economic Offences and Corruption of the Republic of Kazakhstan, on September 18, 2009 the Aktau Town Court (the "ATC") ruled that the General Director of KPM was guilty of allowing KPM to operate a main pipeline without obtaining a state license and sentenced him to 4 years of imprisonment and KPM was ordered to pay to the Republic of Kazakhstan approximately US$ 145.0 million in fines. The General Director of KPM appealed the respective decisions of the ATC with the Mangistau Regional Court, which is scheduled to rule on the appeals on November 12, 2009.
There have been no court hearings or material developments in connection with the ongoing criminal investigations of the former General Directors of TNG and KPM.
Despite the ongoing difficulties facing KPM and TNG in Kazakhstan, and the fact that neither company has any assurance that their legal challenges will ultimately prevail, KPM and TNG continue their efforts to resolve the ongoing claims and litigation matters with the Kazakh authorities.
In connection with the proposed trade sale, the Company remains in talks with a limited number of bidders. The Company cannot provide any guidance in relation to the timing of any potential bidding offer or sale, nor provide any assurances that a sale will be consummated.