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bne October 2019 Companies & Markets I 17
supplementary compensation. This has led to a complex legal battle in numerous international jurisdictions.
KPMG Audit announced that it had canceled eighteen audit reports covering three years of financial statements issued by companies controlled by Stati, stating that "one should not rely on audit reports issued by KPMG Audit LLC".
“The fraudulent scheme committed by Stati and his co-conspirators is a direct attack on the investor-state dispute settlement system”
KPMG took this extraordinary action after reviewing evidence showing that material misstatements existed in the Stati financial statements, that these misstatements were
based on knowingly false representations by Stati to KPMG, and that Stati had relied on the KPMG audit reports, the falsified financial statements, and other false and fraudulent information, to obtain the December 2013 ECT Arbitral Award against Kazakhstan, the Kazakh government said.
KPMG stated in its letter that it took this decision after it “conducted a thorough and independent assessment, which included but was not limited to, the materials” provided
by the Kazakhstani authorities. KPMG also stated that, consistent with International Standards of Auditing, it had sought to engage with Stati on this matter but that he had not responded. Finally, KPMG stated that it had notified Stati of its “conclusion and requested that [Stati] take all steps necessary to prevent any further or future reliance on the [KPMG] audit reports.”
“The fraudulent scheme committed by Stati and his co-conspirators is a direct attack on the investor-state dispute settlement (ISDS) system set up to protect foreign direct investment in Kazakhstan, the statement added.
Fox Marble launches €195mn arbitration proceedings against Kosovo
Valentina Dimitrievska in Skopje
Natural stone extraction company Fox Marble said on September 4 it has launched arbitration proceedings against Kosovo for damages in excess of €195mn due to the failure of the state to protect the company’s rights over the Malesheva quarry.
In July, Fox Marble suspended operations at the Malesheva quarry due to a dispute over the recent acquisition of Green Power, which owns the license for Malesheva, and Scope for £1.3mn (€1.45mn). Green Power and Scope challenged the acquisition agreement. Numerous procedural and legal attempts in Kosovo failed to solve the matter.
The arbitration was initiated at the United National Commission on International Trade Law international (UNCITRAL), the company said.
Fox Marble believes that the Kosovan government is in clear breach of its responsibilities towards the company as a foreign investor in Kosovo, and that the claims challenging the enforceability of the acquisition agreement of Green Power and Scope are wholly unfounded.
"There has been a clear failure by the Kosovo government and its agencies to apply their own laws and regulation in a fair
and equitable manner," Chris Gilbert, Fox Marble's CEO, said in the statement.
The company’s other operations, including the quarries and processing factory in Kosovo and the Prilep quarry in North Macedonia, are unaffected.
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