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Tajik publication attacks Mineweb’s Helmer and his reporting on aluminium group.

Johannesburg – On September 11, Mineweb published a report by John Helmer, entitled “IMF Attacks Tajikistan Aluminium Co – orders international audit”.

Publication followed attempts by Mineweb’s Moscow office to ask the following questions of Talco in Dushanbe:

1. According to an IMF country report for Tajikistan, issued in June, the IMF considers Talco’s non-transparency and financial control to be “most worrisome”. The IMF says: “the financial operations of the aluminum company (Talco), the largest SOE in Tajikistan, remain nontransparent.”

How does Talco respond to the criticism?

2. The IMF also says it has ordered, and Talco has agreed, to “issue tender papers for an audit of Talco’s 2007 financial operations by an internationally recognized auditing company by end-September 2008.” Is this correct? Will the deadline be met?

3. IMF figures reveal that Talco receives a tolling fee each year for its aluminium operations. The fee was $116 million in 2005 — 21% of export value in that year; $173 million in 2006 (17%); $183 million in 2007 — also 17%; and $240 million this year (about 36%). Does Talco dispute the accuracy of the IMF figures?

4. If you add the tolling fee to the value of alumina imports reported by National Bank of Tajikistan, and subtract the total from the value of aluminium exports, also reported by the National Bank of Tajikistan, the balance appears to be a profit figure — $85 million in 2005, $490 million in 2006, $524 million in 2007, and $46 mn in H1 2008. Is this calculation correct?

5. Why has the proportion of the tolling fee to the value of exported aluminium jumped this year? Does this reflect criticism of Talco’s practice of removing profit to the British Virgin Islands?

6. According to testimony in the London High Court, Talco is paying about $10 million per month in legal fees in its case against the Nazarov group. Is this money coming from the tolling fee revenues?

The IMF report referred to is a publicly available document, and can be read at this link:


On September 17 and 18, two publications were issued in Tajikistan by FK Capital, in paper format, and Avesta, in website format. Both are in Russian, and are identical. The author identified is Almaz Nazarov.

Because this lengthy article responds in detail to the Mineweb report, and refers to a Talco reply to the questions Mineweb asked, the following English translation of this article is published in full, and without comment, to enable all sides of this important debate to be heard and analyzed. It has been translated as literally as possible.


By “Diamond” Nazarov, specially for FK-Capital

Or a plot about the one who creates in the West a black image of the Tajik Auminium Copany

Recently in one of the foreign mass-media, there was a publication about the Tajik Aluminium Company which can be judged “black public relations”. “The IMF attacks TALCO: orders the international audit” is placed on the website Mineweb.net on September, 11th, 2008. It is not the first such article about TALCO, that testifies to presence of a real information war against the company and, accordingly, against the economic interests of Tajikistan. Let’s understand the one who stands up for it and why.

John TalCo-ved [“Talco-Know-it-all”]

To unravel all the ball, we will begin with the tip of the thread that sticks out, and which will lead us to the basic coil. In this role there is the English-speaking journalist John Helmer.

Nly with exaggeration is it possible to use the term journalism about him, as first of all he calls himself more of a political scientist and political adviser; and secondly, because he does not adhere at all to the ethical standards of the international journalism.

Mr. Helmer for quite some time now, to be exact from the middle of last year, became TalCo-ved; that is, as though he was the expert concerning the Tajik Aluminium Company. Literally there has not been a single month in the year when he did not write a publication about the enterprise.

He writes only in a negative way, with this general leitmotif of the articles: TALCO is a certain dark company, which does not work by market rules; all is corrupted; it is not independent, it is unprofitable and on the verge of collapse. Here’s a question – from where comes to the Moscow journalist of Australian origin (since 1989 he has been sitting in Moscow) such an interest in the affairs of the Tajik Aluminium Company, as he represents himself as the expert on Russia.

The answer to this question is given by Mr. Helmer on the personal site www.johnhelmer.org http://www.johnhelmer.org/.

Here is a fragment taken from his biography. He was born in Australia; went to the US where he graduated from Harvard University. He has studied up to the rank of a professor of political sciences, and as he said, subsequently was an adviser to heads of governments of the USA, Greece, and of some countries in Asia. “He is the first and only member of the administration of President Jimmy Carter who has been confirmed in Russia” – the site informs — the only foreign journalist who has opened a personal bureau in Russia. The bureau has been opened in 1989, which makes him doyen of the foreign press in Russia.

Yes, modesty is not a seat Mr. Helmer occupies. Now he co-operates with a number of foreign mass-media, including the well-known South African site Mineweb.net devoted to natural resources and mining business. And here a key phrase that is interesting to us (and especially assigned by the author on his personal page): “The Helmer Consultancy [the consulting branch of Bureau Helmer – from the author] provides confidential client services, including government relations, due diligence, litigation support, and market analysis.”

Court yes business

Now it becomes clear why Mr. Helmer, specialising exclusively in Russia, suddenly began persistently to watch carefully for TALCO, and to “bomb” it in all possible ways.

Has the Helmer Consultancy received the political order for “confidential services”, “information support of a lawsuit”?

Otherwise, for what reason does his “antiPR-artillery” carry out the present carpet bombing of the international information field around the Tajik company? Consider, an order of 15 articles in a row!

And what headings: “Big energy wars. TALCO and the Tajjik corruption program” (on August, 6th 2007), “Bed friendship of the companies: business Norsk Hydro in Tajikistan” (on August, 17th 2007), “Hydro Aluminium is accused of corruption in РТ” (on November, 12th 2007), “the Aluminium trick, standing half-billion dollars »(on January, 11th 2008). Something from the past year: “the USA urge to investigate the cost of sale revenues of Tajik Aluminium” (on May, 12th 2008), “Tajik Aluminium at the stage who of whom” (on June, 18th 2008), «IMF attacks TALCO: orders international audit» (on September, 11th, 2008).

Mineweb’s John Helmer…big news in Takijstan

Helmer regularly writes under one article in month, missing only February. The impression is given that there is a concrete order with explicitly stipulated periodicity.

All the Helmer articles, basically, are connected with the court lawsuits of TALCO (as is known, the Tajik company pursues for a second year in the international courts the former traders of the factory – the Ansol Ltd company and the Russian UC Rusal). The chain links to these companies. They more than anyone else are interested in the deterioration of Talco’s foreign image TALCO and the creations of a negative image of the company in western business circles.

Continuing our small investigation and browsing on the Helmer site, we find out that on the same level with TALCO it ruthlessly “floods” also Russian Rusal.

Now by a simple process of elimination it is possible to identify the number-one candidate among customers for the Helmer service such as “support of judicial lawsuits” — Ansol Ltd. and its head Avaz Nazarov.

Uneasy Avaz

Thgere is no sense to say a lot about the ex-Tajik, nowadays maybe Russian, maybe British businessman Avaz Nazarov. The local press are already repeatedly informed about him, and about the general prosecutor’s interest in the ex-general director of Tadaz Abdukodir Ermatov. About them there is talk in the High Court of London. They have left the Tajik Aluminium Company, and the recent history of Tajikistan, and have not returned; they are fugitives. It is obvious that all the anti-Tajik company is doing is an attempt to prevent the win of the Talco management, and to protect themselves. To protect the accumulation made from illegally hidden revenues of TadAZ, to protect themselves from international criminal prosecution.

According to the available information, through Interpol Tajikistan has officially addressed states abroad with a request for extradition of the specific persons accused to their homeland, where they have made an attempt at a coup, and where they have made subsequent attempts at destabilizing the political situation in the country, as well as economic sabotage. By the way, it has become known from informed circles in the law enforcement agencies that in the near future Tajikistan will release new investigation data, according to which the role of Ansol Ltd has been established in recent attempts of destabilization in the country.

Information pressure on the Tajik leadership is an attempt to create in foreign countries the image that [Nazarov and others] are a victim of political prosecution, and that in their homeland a prejudicial court awaits them. The sleepyheads who have stolen millions dollars hold back.

By the way, in the west such perspectives work quite well. The western audience is badly acquainted with the situation in the post-Soviet countries. They blindly trust the mass-media and such authors as Helmer, without finding the time to know another point of view or to get acquainted with alternative sources of information.

In the same way, judges intimidated by such stories a la Helmer can come to subjective decisions, which can affect the total picture…

And still it is obvious, that if the Nazarov affairs go as necessary in court, everything will be quiet and serious, as you can observe in the management of Talco. That’s the side where the truth can be resolved…

As the lie is created

In last publication, John Helmer uses all the techniques of “antiPR” journalism, which however, are not always known to non-specialists. We will try to expose some of them.

So, technique number one – “beat the enemy with his owd words”. The essdential principle consists in use of phrases from interviews, reports or the reports, pulled out of the general context, and framed by the author’s own judgements. Thus, in the article that has been considered by us, there are the words of the President of Tajikistan, in his letter addressed to the Managing Director of the Fund, which ostensibly acknowledge fault for the issue by the National Bank of Tajikistan [NBT] to the IMF of inaccurate reporting.

In the text of the President’s letter, attached to a memorandum of understanding between the parties on the conduct of NBT, it is plainly visible that words of regret are expressed as a part of the etiquette of business correspondence, and they do not reflect the fault of the Tajik leadership before the Fund.

However, the Rahmon phrase is pulled out [of context] and used by Helmer in his article as though the president of the country is almost guilty that the national bank had given doubtful reporting to the IMF. Here it is necessary to note also the fact of the wide distribution of the letter of the president addressed to the head of the Fund Dominique Strauss-Kahn, which, judging by its style, was addressed to him personally, instead of for the press.

The international ethics of diplomatic correspondence assume that such letters are not disclosed. Hardly do heads of the IMF and its missions write in letters to their Tajik colleagues as if they are talking to the press or in public reports.

But we will continue. Mr. Helmer also has skilfully pulled out a phrase about the ostensible concern of the IMF regarding the transparency of Talco’s financial operations.

Here, besides the question to the IMF of whether its representatives have really put such a phrase in an SMP (Staff Monitoring Program) report, there is a different interpretation. Whether there is general non-transparency in Talco’s financial structure, or whether it is poorly transparent to the Tajik government and state budget. Helmer skilfully used this ambiguity, and puts TALCO in perplexity. They are in no way connected with the scandal around NBT (concerning which, as a matter of fact, there was an IMF report), and from the beginning they have been open to cooperation with the IMF. Also, the author [Helmer] has pulled out of context the word of the ambassador of the USA in the Republic of Tajikistan, Tracey Jacobson.

Upside down

Imposing John Helmer’s article on the full texts of originals of reports, letters, accounting, which it used, it is possible to say that the author has turned everything upside down. Thus, a careful reading of the report of IMF shows that the Fund makes no serious charges on Talco. And it cannot have done so, because the report in general is devoted to the National Bank, and the aluminium company is mentioned there in only two lines.

Later, the head of the IMF representation in Tajikistan Mr. Luc Moers, in an interview to local mass-media, has declared that the IMF has no claims to TALCO and recommends the undertaking of an international audit in the company, with a view to revealing possible sources of taxation, and for improvement of its foreign investment appeal.

The ambassador of the USA has also said from time to time in the press that the US was not the initiator of the audit oif Talco and Barki Tochik, but had supported this initiative on the same level as other member countries. Nowhere did she express doubt in the transparency of the aluminium company.

Perhaps, all of them secretly correspond with John Helmer and inform him of something they do not dare to say in Dushanbe? We hope that we will hear their precise position on this question and their comment on the Helmerr article.

Has not telephoned

One more technique – “to show objectivity”. Ethical standards of international journalism demand from the author the obligatory use in publications of the opinion of the other side. That is, if the author subjects someone to criticism, it is required to gather their opinion and to show it to the audience. This provides the relative objectivity of the dissemination of information and observance of the norms of freedom of speech in the West; infringement of this rule is strictly condemned in their environment.

Helmer applying for the role of dean of journalism has been compelled to show that he is impartial. But how to do this at the same time without considering the opinion of Talco (if not paid)? Very simply – to claim that communication was tried, but not effected. As a result Mr. Helmer specifies in the publication that he did not manage to telephone to the Talco office, and that an inquiry by e-mail has not been answered. This is a manifest lie.

As Talco representatives inform, they are called daily from the government, by representatives of mass-media, and business partners from different points of the world, and all dial in perfectly. Only for some reason the skilful Helmer could not. Can he have called at two o’clock in the morning?

As to e-mail, the press-service of Talco really received his letter, at 17.00 on Dushanbe time on September 11th when official working hours have ended. Despite that, in TALCO they have started to prepare the answer the same day, the faster to satisfy the inquiry of the foreign journalist. But … the answer was not necessary, the article has already appeared at this time on the Mineweb website, and in a couple of hours in a Russian variant and on other sites.

The invitation in court

Investigation by Talco has shown that the article has been published on the Mineweb site at roughly at 16.07 on Dushanbe time. This fact can be established from the time of indexation of the article by the search system Yahoo News (on Yahoo time Yahoo it is 06.07 AM on September 11th).

Considering the difference in time with Tajikistan, it is simple to calculate that Helmer has written the letter-inquiry to TALCO when his article had already been published.

It did not consider the opposite opinion at all! In advance, he has adjusted the information that at Talco no answer had been provided. This roughest infringement of norms of journalistic ethics also is directed on drawing a loss of business reputation of the Tadjik company. With coordination with the proceedings in London, it is also possible to consider this an attempt at putting pressure on the court.

As Talco has declared, they are ready to begin suit against the author and the Mineweb site for intentional loss of their business reputation.

It is not excluded that the claim also will be shown by them to the Tajik government for the protection of the honour and dignity of the President of Tajikistan, who has been insulted in previous articles by Helmer.

Tolling is a standard practice

In spite of the fact that Helmer has not allowed the possibility to Talco to express its point of view on his questions-charges, the company’s press-service has decided to share this information with the public.

«Helmer criticises the present tolling system of business applied by Talco,” says the head of the press-service, Saehat Kadyrova. “But for some reason he holds back that almost all the largest metallurgical companies of the world work under this scheme. Almost all have tolling partners registered in offshore zones as it is a part of the optimisation of business on such a large scale.”

If the largest global transnational corporations, possessing their own huge capital, practice [tolling], what choice is there at Talco, which until now has not had the possibility to attract the necessary investments, due to the debts created by the former management and court claims?

In this situation tolling became the rescue of the national company. Mr. Helmer, and other parties doubting Talco’s transparency, for some reason nowehere point out that, after the introduction of tolling, there was profit here for the first time for many years.

The company has had the opportunity to invest considerable sums in support of the social sector, to increase the salary of workers by 105 %, and has spent over the last three years more than $100 million on the modernization of manufacture.

What can be said about the non-transparency of the company when there is a board of directors whose collective decisions have been established for the first time? Such decisionmaking is a fundamental condition for transparency. Earlier (until 2004) even the usual information on how much aluminium was produced was impossible to get. Today all financial and economic indicators which are published both through the press, and through a company site, Talco.tj, will be issued quarterly.

With audit agree

In the report of IMF concern for the transparency of Talco operations stems from the fact that that the company did not pass an audit of “internationally known auditors”.

This has omitted to note that Talco’s international audit has been carried out regularly for the last years by the English company Moore Stephens. Simply, this [firm] does not enter into the “big Four of world auditors”, who are known take big money for the same audit. But our aluminium company did not need to prove until now its transparency at such a grandiose level. It is accountable only to the government of the country which trusts it.

But the time has come when the President has promised to the international financial institutions that Talco too will pass check at such level. The company will execute the commission of the head of state to the full extent. And even here this shows the aspiration to full transparency.

For the last four months Talco has discussed with the IMF and the government the detail of the proposed audit. The technical project is already ready, and at the end of September Talco will carry out the tender for selecting the company which will book its international audit.

By the plan company activity should be checked only for 2007. But the management has gone further and has declared — please, check up also for 2006 that it should be more transparent. Why does nobody tell such facts? Why do all who thirst for checks of Talco not rejoice at such openness? That can be because a check for two years and more will show how exactly, thanks to tolling, since the end of 2004 the indicators of financial liquidity of the company have considerably improved.

Open data

If in 2004 (during the term of Ermatov) all that reached the banking system of Tajikistan from sale of the Tajik aluminium was $62 million in cash. Now more than $1 billion arrive.

Separately about tolling partners. There is an erroneous opinion that they gain super-profits, which arise because of the huge sum gained in the sale of aluminium. Tajik aluminium is on sale at a price that is according to quotations of the London stock exchange of metals. Last year 415,000 tonnes of metal have been produced at an average price of $2,600-$2,630 dollars per tonne, making revenues of $1.070 billion. But it is necessary to consider also the costs which have been incurred in connection with the manufacture of the aluminium produced. These expenses are borne by the company though tolling. Thus, alumina was delivered to the factory at a price of more than $645 per tonne. Taking into account that for the manufacture of one tonne of aluminium two tonnes of alumina are needed, in 2007 it was required to create stocks of more than 1 million tonnes of the raw material, this makes more than $645 million.

In aluminium manufacture also required are, aluminium fluoride costing $1,52 per tonne; cryolite $1,402, pitch $518, calcinated coke $310, crude coke $232. In general, there are 24 basic and auxiliary raw materials. Reasonable expenses arise for electric power use, including taking into account its deficit in the region during the winter period; and for transportation of incoming raw materials and dispatch of finished goods.

S.Kadyrov from Talco has observed that all the working capital is provided by tolling with partners. Considering the big complexities in attracting finance and management in the aluminium business, Talco does not consider itself restricted by tolling operations. “Most important,” said the press-secretary of the company, “unlike the previous years,

today all revenues for aluminium are completely transparent and are placed exclusively on the accounts of banks of Tajikistan, irrespective of whose money it is – the tolling partners or the State Unitary Enterprise Talco.”

What is better: Talimarjan or Yavan?

And what did the former management of Tadaz build? Anything. And its partner Ansol Ltd on concealed incomes built a state district power station and other facilities in Uzbekistan (Talimarjan), Russia, etc.

The new Talco has turned into an energo-metallurgical company, investing $25 million in the reconstruction of the Yavan thermal power station, thus bringing a practical contribution to ameliorating the energy crisis in the country. Help the national economy, build houses, school establishments, stadiums, help the local industry, placing a part of its procurement orders in the country …

Talco, together with partners, for the first time has created an airline with the use of modern western air liners; trained and prepared flight and engineering structures. In Dushanbe they have initiated a 5-star hotel that is under construction. The building of enterprises for output of cryolite has begun, aluminium fluoride and cathodes – and this is all thanks to the aluminium business. Within the next year the building of two brick-works and a plant for manufacture of aluminium cables will be finished. Together with the company Hitch, preparation of a bank feasibility report for construction of the first [downstream] aluminium factory in Tajikistan and other projects … has begun


Luc Moers, the resident representative of IMF

I have received calls from local mass media referring to an article which has appeared in the Internet publication “MineWeb” on September, 11th, under the title “The IMF attacks the Tajik Aluminium Company, demanding an international audit”, based on reference to the last report of IMF staff across Tajikistan.

I wish to declare that this article very strongly distorts the report and is full of the distorted citations. Everyone can be convinced of this since the report of the personnel of IMF, by the way, became accessible to public use more three months ago, and, thus, since then is published on the website of the IMF and my office of Permanent mission (<http://www.imf.org/external/country/tjk/rr/>). Moreover, since then I have held a press conference on it.

The report describes the governmental macroeconomic parameters and the structural reforms supported by the IMF Staff Monitoring Program [SMP], which covers the second half of the year of this year.

Macroeconomic parameters are directed to restriction of the negative consequences of the problems of last winter, and to a timely decrease in the rate of inflation. At the heart of the structural reforms lie measures to strengthen the autonomy and management of National Bank of Tajikistan.

Other measures consist in the announcement of a tender for carrying out an international audit of TalCo to improve its financial transparency.

TalCo and the government have incurred the full obligations for this, and we are happy with the progress that has been reached. We do not doubt, that the tender will be declared by deadline at the end of September, and we wait for results of the auditor check.

In general, the SMP sees the merit of the government that is a necessary component of macroeconomic stability, growth and struggle against poverty in Tajikistan.

P.S. The publication FK-Capital has made an inquiry on Monday [September 15] at the IMF Representation in the Republic of Tajikistan, concerning the Helmer article. However, an answer has not been received. Mr. Moers has written the comment to the address of Talco, which has been readdressed to us at our request by the company’s press-service. We consider the fact of the refusal of the IMF to answer our questions an indirect recognition of the fault in the distortion by the Mineweb journalist of their data and as consequence, the deterioration of image of Tajikistan. It is obvious that the founders of reports in the IMF should weigh more carefully their definitions and terms which, in consequence, were not required for further explanations or refutations.

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