Former Centerra CEO detained again in Bulgaria over Kyrgyz corruption allegations

TORONTO – Toronto-based miner Centerra Gold says former CEO Leonard Homeniuk has been rearrested on corruption charges in Bulgaria after first being detained by authorities last month.

Homeniuk was taken into custody in late July while on vacation with his family after the Kyrgyzstan government issued an international arrest warrant for him on corruption charges.

John Pearson, a spokesman for Centerra Gold (TSX:CG), said Homeniuk had been under house arrest in the Bulgarian capital of Sofia but has now been transferred to detention in Vidin.

Pearson said he didn’t know why Pearson has been rearrested but added that the company has been in contact with the Department of Foreign Affairs.

“We’re using all our efforts to assist Mr. Homeniuk in his review of the legality of his detainment so that he can return to his home in North America,” Pearson said.

The department says it is aware of Homeniuk’s detention but refused to provide details, citing confidentiality concerns.

The government of Kyrgyzstan has accused Homeniuk of corruption in his dealings with Kyrgyz officials in 2003 when Centerra Gold was spun off from Saskatchewan-based uranium miner Cameco Corp. to manage the massive Kumtor gold mine project.

Pearson said there is no evidence to support Homeniuk’s arrest.

“Despite repeated requests to Kyrgyz authorities, we’ve received no facts or information to support the charges,” Pearson said.

Homeniuk led Centerra Gold from its founding in 2004 until his retirement in 2008.

Kyrgyzstan and Centerra Gold have sparred over the ownership and revenue of the Kumtor mine for years as the mine has grown to become a key piece of the Kyrgyz economy, and negotiations are ongoing over the future of the project.

The country has seen two violent regime changes — in 2005 and 2010 — since the original deal was signed, and successive governments have tried to renegotiate the terms of the deal to get more revenue from the Kumtor project flowing into government coffers.

The parties struck a new deal in 2009, yet the current government is still unhappy with the terms.

According to the Economist, the Kumtor mine accounts for as much as 12 per cent of the country’s GDP and half of its exports.

In 2012, the government launched an inquiry into the 2003 restructuring of the mine’s ownership, hiring two Israeli firms to perform an investigative audit.

In 2014, Kyrgyzstan prosecutor general Aida Salyanova visited Ottawa for bilateral meetings on corruption and legal co-operation between the two countries.