Further to the announcement of 4 December 2014, KK PLC announces that its application to amend its $150m fraud claim against its former directors and shareholders to add additional claims of a further $45m was refused by the English Commercial Court on 21 January 2015. Permission given at the end of November 2014 to add Mrs Sholpan Arip as a defendant has now been set aside.

The Honourable Mr Justice Leggatt held that, although there was a good case that members of the Kazakhstan Kagazy Group had been defrauded by certain land transactions entered into by the defendants, KK PLC could not trace the proceeds of those transactions (claimed by KK PLC to represent funds misappropriated from its July 2007 IPO) directly into the hands of the defendants.

However, the Judge also observed that Kazakhstan Kagazy Group entities besides KK PLC could have a reasonable prospect of success in bringing a personal claim of $45m against the defendants, stating:
"It follows from what I have said so far that if the new claim advanced had been a personal claim by the second claimant [Kazakhstan Kagazy JSC] similar to the two existing claims made against Mr Zhunus and Mr Arip alleging fraudulent misappropriation of money, I would have considered that it easily surmounted the hurdle of showing a real prospect of success, subject to any limitation defence that may arise"

The Company also intends to apply to the Court of Appeal for permission to appeal the Judge's finding that it cannot bring a claim for the misappropriation of IPO monies that is alleged to have occurred when the former shareholders were directors of the Company.

It is essential to note that the 21 January judgment does not relate to the original claims of over $150,000,000 brought by the KK Group against Messrs Arip and Zhunus. The London High Court will consider these claims at a trial, expected in 2016. Pending the trial, a GBP72,000,000 ($110,000,000) freezing injunction remains in force against the worldwide assets of Messrs Arip and Zhunus.

Contacts
Kazakhstan Kagazy PLC
Hugh McGregor General Counsel and Company Secretary + 7 (727) 244 87 87

Daniel Stewart & Company PLC
David Coffman / Liz Kirchner (Financial Adviser) / Martin Lampshire (Broker)
Tel +44 (0) 20 7776 6550

About Kazakhstan Kagazy PLC
London Stock Exchange listed Kazakhstan Kagazy PLC is the largest paper, packaging and recycling group in Kazakhstan and Central Asia.

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