DUSHANBE, February 18, 2015, Asia-Plus -- The Tajik Aluminum Company (TALCO) has to pay tax debts of Russian investment company, Sozidaniye LLC.

By Tajik government’s regulation approving the draft amicable agreement between the Tajik Aluminum Company and the companies of Talco Management Limited, Hamer Investment Limited, CDH Investment Corporation, Alumina and Bauxite Company Limited and Redao Holdings S.A., which was signed in late January, TALCO is obligated to pay tax debts of Sozidaniye LLC (Hyatt Regency Dushanbe Hotel).

Sozidaniye LLC’s tax debts and fines for delay have reportedly reached more than 322,352,898 somoni (equivalent to nearly 60 million U.S. dollars).

Sozidaniye LLC is owned by one of companies of Russia billionaire Oleg Deripaska, who has close ties to the Kremlin and owns RusAl (Russian aluminum company).

By signing this regulation the Government of Tajikistan reportedly intends to renounce its claims over Sozidaniye’s tax debts in exchange for RusAl’s renouncing its financial claims against TALCO.  

We will recall that TALCO and RusAl have agreed to renounce mutual claims.

“TALCO and RusAl managements have signed an agreement that is expected to be approved by the Government of Tajikistan and the RusAl Board of Directors in late February this year,” Igor Sattarov, a  spokesman for TALCO, told Asia-Plus in an interview on February 17.

In August 2007, Tajikistan formally revoked a contract with RusAl for the construction of the Roghun hydroelectric power station (HPP).  The cancellation of the contract also included the “annulment” of the October 2004 agreement on “long-term cooperation” with RusAl.  According to the contract, RusAl agreed to construct the Roghun HPP.

In October 2013, RusAl reported that it has won $275 million in damages from TALCO.  According to TALCO, a Swiss tribunal found TALCO in breach of two 2003 agreements with RusAl subsidiary Hamer Investing, Ltd.  Under those agreements, Hamer had supplied TALCO raw materials for which the state-run Tajik company had failed to pay.  The tribunal ordered TALCO to pay damages in excess of $112 million, approximately $147 million in interest, and almost $15 million in legal fees, the RusAl statement said.

The statement also said the tribunal had thrown out TALCO’s $400 million counterclaim, in which the company argued that Hamer’s original contracts should be deemed invalid as they had been won by corrupt means.

Besides, Alumina & Bauxite Co. Ltd. (Albaco), a subsidiary of RusAl, filed an application with the Eastern Caribbean Supreme Court for the appointment of liquidator for CDH Investments Corp (CDH).  According to press release issued by RusAl, Albaco filed the application in order to “get confidential materials of CDH Investments Corp.”  “The liquidator that will be appointed by us will collect and disclose the information on money transfers, directors and other materials concerning CDH,” the press release said, noting that Albaco obtained an order dated October 16, 2013 from the High Court of Justice of the British Virgin Islands, entering judgment on an arbitration award issued for approximately 70 million USD against CDH).

The arbitration award relates to the supply of alumina to the Tajik aluminum smelter, press release said.  The arbitration award was reportedly issued in Albaco’s favor by a three-member tribunal sitting in Switzerland in accordance with the Rules of the International Chamber of Commerce.  The tribunal held that CDH had breached a supply contract with Albaco for the sale-purchase of alumina.

The Tajik Aluminum Company (TALCO) is one of the ten largest aluminum smelters in the world and provides up to 70% of the country’s foreign currency earnings, consuming some 40% of the country’s electrical power.  TALCO is wholly owned by the Tajik government.  Tajikistan does not mine alumina but imports the raw material through tolling arrangements.

Construction of the Tajik aluminum plant (TadAZ) began in 1972, and the first pouring of aluminum took place on March 31, 1975.  On April 3, 2007, TadAZ was officially renamed to TALCO – Tajik Aluminum Company.

United Company RusAl (Russian Aluminum) is the world''s largest aluminum company.  RusAl accounts for almost 9% of the world''s primary aluminum output and 9% of the world’s alumina production.  The United Company was formed by the merger of RusAl, SUAL, and the alumina assets of Glencore, completed in March 2007.  The company operates in 19 countries over five continents and employs over 72,000 people across its international operations and offices.  The company is incorporated in Jersey, where it has its financial centre, but its headquarters are in Moscow, Russian Federation.