LAS VEGAS (CN) – Corrupt business partners in Kazakhstan grabbed 41 percent of Turan Petroleum and swiped $800,000 of a $1.3 million investment, according to a tangled complaint from a Turan partner in Clark County Court. “The business culture and legal system of Kazakhstan can present considerable challenges for foreigners wishing to engage in business there,” the lawsuit states, in a masterpiece of understatement.
Turan founder Anatoly Vanetik says that when his company began to look for new oil and gas drilling rights in Kazakhstan, he approached Askar Karabayev, who held himself out as an expert on business practices in the former Soviet republic.
“To be successful, (defendant) argued that Turan must engage the services of various consultants and experts, and that these individuals be compensated through their affiliated offshore entities in Turan stock,” the complaint states.
Vanetik claims the consultants Karabayev used were shell corporations that he controlled. He says the deal allowed Karabayev to secretly amass a significant amount of the company’s shares before drilling began.
Karabayev then secured a seat on the board of directors, and loaded the board with three Kazakhstan nationals, “none of whom speaks English and none of whom has experience as a director of an American corporation,” according to the complaint.
Karabayev then named himself president of the company, and appointed a longtime friend, Naum Voloshin, as chief operating offer.
“With his cronies now occupying critical seats on Turan’s board,” Karabayev hatched a plan to launder his shares through a “convoluted and unlawful series of highly irregular transactions,” which included canceling millions of his shares to “reduce his exposure to litigation for failure to provide consideration in exchange for the original transfer of shares,” the lawsuit states.
In the end, Karabayev got about 46 million shares of Turan stock, or 41 percent of the outstanding shares, the lawsuit states. Karabayev and Voloshin ended up diverting $800,000 of their $1.3 million investment to an account they controlled, according to the complaint.
Vanetik is represented by Todd Kennedy with Lionel Sawyer.