Kyrgyzstan freezes local Centerra unit accounts

By Olga Dzyubenko

BISHKEK, June 20 (Reuters) - A Kyrgyz court on Friday froze the local bank accounts of Centerra Gold's (CG.TO: Quote, Profile, Research) subsidiary in the country over a back tax claim, but the company said the move would not affect its operations.

Canada's Centerra, which is developing the Kumtor gold mine in Kyrgyzstan, has run into trouble in the central Asian state after its framework agreement expired following a June 1 ratification deadline.

Last month a court ordered that Kumtor Gold, the unit developing the deposit, should pay $2.6 million in back taxes, a ruling the company vowed to challenge. On Friday, another court ordered its local accounts should be seized to comply with that ruling.

Kumtor said the move would have no impact on its operations.

"The court decision will not have any impact on the company's production," Kumtor Gold Chief Executive Andrei Sazanov said a written reply to questions from Reuters. "Kumtor Gold Company will certainly file an appeal in a higher court."

Centerra's key shareholders -- the Kyrgyz government and Canada's Cameco (CCO.TO: Quote, Profile, Research) -- are trying to agree on a new scheme of sharing income from the operation after the parliament blocked a deal they agreed on last year.

Adding to its woes, Kyrgyz courts have separately suspended some of Centerra's licenses following a lawsuit filed by a parliament deputy.

The government said earlier it would carry out a new round of talks with Centerra executives who are due to arrive in the capital Bishkek on June 23. (Reporting by Olga Dzyubenko; Writing by Olzhas Auyezov; Editing by David Holmes)