DUSHANBE, September 5, 2014, Asia-Plus -- The appeals board of Tajikistan’s High Economic Court has upheld the verdict of the Khatlon Economic Court regarding invalidation of the transaction for the sale of TojikAzot, an official source at Tajikistan’s High Economic Court told Asia-Plus on September 4.

We will recall that the Khatlon Economic Court invalidated the transaction for the sale of TojikAzot on June 24 this year.

TojikAzot, the fertilizer factory located in the southern province of Khatlon, was partly state owned, with the government controlling a 20 percent stake in the troubled enterprise.  Ostark Ventures Limited (Ukrainian oligarch Dmitry Firtash is beneficial owner of Ostark Ventures Limited) assumed the 75% ownership interest in the enterprise and Khairullo Saidov, the son of ex-Minister of Industry Zayd Saidov, owned 5 percent of shares in TojikAzot.

As far as the sale of 5 percent of shares by Ostark Ventures Limited to Khairullo Saidov is concerned, representatives of the State Committee n Investment and State-owned Property Management (GosKomInvest) claim that this contract is illegal because the deal was carried out without the authorization of the Tajik government, which owns 20 percent shares in the enterprise.

Meanwhile, lawyer Ishoq Tabarov who represents Khairullo Saidov in the court, says the deal was legal and the document was registered with the Ministry of Justice.  He noted that he would appeal Tajikistan’s High Economic Court. 

Tajikistan’s Agency for State Financial Control and Combating Corruption in March this year announced an investigation into a 2002 deal between Dmitry Firtash and the Tajik government to create TojikAzot, a plant specializing in the production of carbamide, an organic compound used in fertilizer.  The anticorruption agency accuses Firtash of illegal privatization of the company in 2002 and misappropriation of funds.

Firtash was arrested in Vienna on March 12, 2014, and released on a 125 million Euro bail two days later.

Following Firtash’s arrest, Tajikistan’s anticorruption agency charged him on March 15 with the illegal privatization of the clothing factory Guliston in 2002.

The anticorruption agency has argued that Zayd Saidov was involved in the fraudulent privatization of Guliston and TojikAzot.

The fertilizer plant has not been in operation since 2008 due to lack of natural gas supplies.  Until 2008, when neighboring Uzbekistan upped the price of natural gas, a key input for the factory, TojikAzot served as a foreign investment-success story for Tajikistan’s economy.