SEC Company Response from Freedom Holding Corp. (FRHC) (CIK 0000924805) (FRHC) — May 6, 2009
Freedom Holding Corp. (FRHC) (CIK 0000924805)
Date: May 6, 2009 · CIK: 0000924805 · Accession: 0001038838-09-000119
AI Filing Summary & Sentiment
Referenced dates: April 9, 2009
Letter
United States Securities and Exchange Commission Division of Corporate Finance Form 10-K for the Fiscal Year Ended March 31, 2008 Filed on June 16, 2008 Response letter files March 6, 2009 File No.: 1-33034
Dear Mr. Schwall:
At the request of the management of BMB Munai, Inc., (the “Company” or “BMB Munai”) we are responding to comments raised by the staff at the Securities and Exchange Commission in your letter dated April 9, 2009. Following are the Company’s responses to your comments.
Form 10-K for the Fiscal Year Ended March 31, 2008
Marketing and Sales to Major Customers, page 8
1.
We note your response to prior comment 1. Please revise your disclosure to describe the material terms of your supply arrangement with Euro-Asian Oil.
The fourth paragraph under the heading “Marketing and Sales to Major Customers” on page 8 already provides some of the material terms of the Company’s supply arrangement with Euro-Asian Oil. The Company proposes to provide additional disclosure by revising the paragraph as follows:
“Our crude oil exports are transported via the Aktau sea port to world markets. Pursuant to our agreement with Euro-Asian Oil, delivery is FCA (Incoterms 2000) at the railway station in Mangishlak. The oil is shipped via railway cars provided by Euro-Asian Oil. The volume and sales price are determined on a monthly basis, with all payments being coverd by an irrevocable standby letter of credit opened through a first-class international bank. Sales price is based on the average quoted Brent crude oil price from Platt's Crude Oil Marketwire for the three days following the bill of lading date less a discount for transportation expenses, freight charges and other expenses. The quality of crude oil supplied must meet minimum quality specifications.
POULTON & YORDAN
TELEPHONE: 801-355-1341
324 SOUTH 400 WEST, SUITE 250
FAX: 801-355-2990
SALT LAKE CITY, UTAH 84101
POST@POULTON-YORDAN.COM
Mr. H. Roger Schwall
May 6, 2009
Page 2
Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 31
2.
We note your response to prior comment 2. Please expand the proposed disclosure to specify the amounts of environmental payments paid for the years ended March 31, 2008 and March 31, 2007.
The Company proposes to revise the third bullet point of the third paragraph of its disclosure under the heading “General and Administrative Expenses”on page 36 to clarify that the “environmental payments” was for the flaring of natural gas:
“a 208% increase in taxes from environmental payments for flaring of increased volumes of unused natural gas resulting from increased production. The amount of the environmental payments totaled to $984,542 and $222,414 in the years ended March 31, 2008 and March 31, 2007, respectively; and”
Exhibits, page 69
3.
We note your response to our prior comment 13. Please supplementally provide us with your amended exhibit index. We note that the index should include the document that evinces your supply arrangement with Euro-Asian Oil, your main customer.
Following please find our proposed amended exhibit index, which includes the document that evinces our supply arrangement with Euro-Asian Oil (Exhibit 10.11):
Exhibit No.
Exhibit Description
2.1
Certificate of Merger dated February 15, 1994(1)
2.2
Plan and Agreement of Merger dated February 15, 1994(2)
2.3
Plan and Agreement of Merger(7)
3.1
Certificate of Incorporation of AU ‘N AUG dated February 15, 1994(1)
3.2
Certificate of Amendment to Certificate of Incorporation of AU ‘N AUG dated April 11, 1994(1)
3.3
Certificate of Amendment to Certificate of Incorporation of InterUnion Financial Corporation dated October 17, 1994(1)
3.4
Amended Certificate of Incorporation(8)
3.5
Articles of Incorporation of BMB Munai, Inc.(13)
3.6
Amendment to Articles of Incorporation of BMB Munai, Inc.(16)
3.7
Bylaws of InterUnion Financial Corporation(1)
3.8
Amended By-Laws(11)
3.9
By-Laws of BMB Munai, Inc. (as amended through January 13, 2005)(13)
3.10
By-Laws of BMB Munai, Inc. (as amended through June 23, 2006)(16)
3.11
Certificate of Amendment of By-Laws of BMB Munai, Inc. (as amended through March 26, 2008) (22)
4.1
Instruments Defining the Rights of Security Holders Including Indentures(2)
4.2
BMB Munai, Inc. 2004 Stock Incentive Plan(12)
4.3
Registration Rights Agreement dated December 2005(15)
4.4
Trust Deed Relating to U.S. $60,000,000 5.0 per cent Convertible Notes
due 2012(19)
4.5
Registration Rights Agreement dated July 13, 2007(19)
4.6
Paying and Conversion Agency Agreement dated July 13, 2007(19)
Mr. H. Roger Schwall
May 6, 2009
Page 3
4.7
Form of 5.0% Convertible Notes due 2012(19)
4.8
Indenture dated September 19, 2007(20)
4.9
Form of 5.0% Convertible Senior Note due 2012(20)
4.10
BMB Munai, Inc. 2009 Equity Incentive Plan(23)
10.1
ITM Software Development Agreement(2)
10.2
Letter of Understanding dated November 30, 1995(2)
10.3
Investment Management Agreement dated December 20, 1995(3)
10.4
Agreement between Havensight Holdings Ltd. and InterUnion Financial Corporation dated January 19, 1995(3)
10.5
Letter of Understanding dated September 26, 1996(4)
10.6
Letter Agreement dated January 7, 1997(4)
10.7
Amendment to Letter of Understanding dated April 16, 1997(5)
10.8
Services Agreement dated July 5, 2002(6)
10.9
Agency Agreement dated November 26, 2003(7)
10.10
Share Purchase and Sale Agreement dated May 24, 2004(9)
10.11
Contract #EO-EAO/30-12 for the Sales and Purchase of Crude Oil between Emir Oil LLP and Euro-Asian Oil AG*
10.12
Contract for Carrying Out Exploration of Hydrocarbon Resources*
10.13
Addendum No. 1 to Contract for Carrying Out Exploration of Hydrocarbon Resources*
10.14
Addendum No. 2 to Contract for Carrying Out Exploration of Hydrocarbon Resources*
10.15
Addendum No. 3 to Contract for Carrying Out Exploration of Hydrocarbon Resources(14)
10.16
Addendum No. 4 to Contract for Carrying Out Exploration of Hydrocarbon Resources*
10.17
Form Restricted Stock Agreement of BMB Munai, Inc. dated March 30, 2007 (17)
10.18
Form Employment Agreement(18)
10.19
Placement Agreement dated July 13, 2007(19)
10.20
Indenture dated September 19, 2007(20)
10.21
Consulting Agreement dated November 19, 2007(21)
10.22
Addendum No. 5 to Contract for Carrying Out Exploration of Hydrocarbon Resources(24)
10.23
Addendum to Contract #EO-EAO/30-12 Between Emir Oil LLP and Euro-Asian Oil AG*
10.24
Form Restricted Stock Agreement of BMB Munai, Inc. dated July 17, 2008 (25)
10.25
Employment Agreement – Leonard Stillman(25)
10.26
Revised Consulting Agreement dated September 16, 2008(26)
10.27
Addendum No. 6 to Contract for Carrying Out Exploration of Hydrocarbon Resources (27)
10.28
Addendum No. 7 to Contract for Carrying Out Exploration of Hydrocarbon Resources (28)
12.1
Computation of Earnings to Fixed Charges(29)
14.1
Code of Ethics(10)
21.1
Subsidiaries(29)
23.1
Consent of Chapman Petroleum Engineering Ltd., Independent Petroleum Engineers*
23.2
Consent of Hansen, Barnett & Maxwell, P.C., Independent Registered Public Accounting Firm*
23.3
Consent of BDO Kazakhstanaudit, LLP Independent Registered Public Accounting Firm*
Mr. H. Roger Schwall
May 6, 2009
Page 4
31.1
Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
31.2
Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
32.1
Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2
Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
*
Filed herewith.
(1) Incorporated by reference to the Registration Statement of the Registrant on Form 10-SB filed with the Commission on August 7, 1996.
(2) Incorporated by reference to the Amended Registration Statement of the Registrant on Form 10-SB/A filed with the Commission on November 14, 1996.
(3) Incorporated by reference to the Amended Registration Statement of the Registrant on Form 10-SB/A filed with the Commission on March 31, 1997.
(4) Incorporated by reference to the Amended Registration Statement of the Registrant on Form 10-SB/A filed with the Commission on April 15, 1997.
(5) Incorporated by reference to Registrant’s Annual Report on Form 10-KSB filed with the Commission on June 20, 1997.
(6) Incorporated by reference to the Registration Statement of the Registrant on S-8 filed with the Commission on August 30, 2002.
(7) Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on December 11, 2003.
(8) Incorporated by reference to Registrant’s Quarterly Report on Form 10-QSB filed with the Commission on February 20, 2004.
(9) Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on May 25, 2004.
(10) Incorporated by reference to Registrant’s Annual Report on Form 10-KSB filed with the Commission on June 29, 2004.
(11) Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on September 3, 2004.
(12) Incorporated by reference to Registrant’s Definitive Proxy Statement on Schedule 14A filed with the Commission on September 20, 2004.
(13) Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on January 18, 2005.
(14) Incorporated by reference to Registrant’s Quarterly Report on Form 10-QSB filed with the Commission on February 14, 2005.
(15) Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on December 29, 2005.
(16) Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on June 26, 2006.
(17) Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on April 5, 2007.
(18) Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on April 12, 2007.
(19) Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on July 19, 2007.
(20) Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on September 25, 2007.
(21) Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on November 21, 2007.
(22) Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on April 1, 2008.
(23) Incorporated by reference to Registrant’s Revised Definitive Proxy Statement on Schedule 14A filed with the Commission on June 23, 2008.
(24) Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on June 25, 2008.
Mr. H. Roger Schwall
May 6, 2009
Page 5
(25) Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q filed with the Commission on August 11, 2
Show Raw Text
CORRESP
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filename1.htm
POULTON & YORDAN
ATTORNEYS AT LAW
RICHARD T. LUDLOW
May 6, 2009
H. Roger Schwall
Assistant Director
United States Securities and Exchange Commission
Division of Corporate Finance
Washington, D.C. 20549
Re:
BMB Munai, Inc.
Form 10-K for the Fiscal Year Ended March 31, 2008
Filed on June 16, 2008
Response letter files March 6, 2009
File No.: 1-33034
Dear Mr. Schwall:
At the request of the management of BMB Munai, Inc., (the “Company” or “BMB Munai”) we are responding to comments raised by the staff at the Securities and Exchange Commission in your letter dated April 9, 2009. Following are the Company’s responses to your comments.
Form 10-K for the Fiscal Year Ended March 31, 2008
Marketing and Sales to Major Customers, page 8
1.
We note your response to prior comment 1. Please revise your disclosure to describe the material terms of your supply arrangement with Euro-Asian Oil.
The fourth paragraph under the heading “Marketing and Sales to Major Customers” on page 8 already provides some of the material terms of the Company’s supply arrangement with Euro-Asian Oil. The Company proposes to provide additional disclosure by revising the paragraph as follows:
“Our crude oil exports are transported via the Aktau sea port to world markets. Pursuant to our agreement with Euro-Asian Oil, delivery is FCA (Incoterms 2000) at the railway station in Mangishlak. The oil is shipped via railway cars provided by Euro-Asian Oil. The volume and sales price are determined on a monthly basis, with all payments being coverd by an irrevocable
standby letter of credit opened through a first-class international bank. Sales price is based on the average quoted Brent crude oil price from Platt's Crude Oil Marketwire for the three days following the bill of lading date less a discount for transportation expenses, freight charges and other expenses. The quality of crude oil supplied must meet minimum quality specifications.
POULTON & YORDAN
TELEPHONE: 801-355-1341
324 SOUTH 400 WEST, SUITE 250
FAX: 801-355-2990
SALT LAKE CITY, UTAH 84101
POST@POULTON-YORDAN.COM
Mr. H. Roger Schwall
May 6, 2009
Page 2
Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 31
2.
We note your response to prior comment 2. Please expand the proposed disclosure to specify the amounts of environmental payments paid for the years ended March 31, 2008 and March 31, 2007.
The Company proposes to revise the third bullet point of the third paragraph of its disclosure under the heading “General and Administrative Expenses”on page 36 to clarify that the “environmental payments” was for the flaring of natural gas:
“a 208% increase in taxes from environmental payments for flaring of increased volumes of unused natural gas resulting from increased production. The amount of the environmental payments totaled to $984,542 and $222,414 in the years ended March 31, 2008 and March 31, 2007, respectively; and”
Exhibits, page 69
3.
We note your response to our prior comment 13. Please supplementally provide us with your amended exhibit index. We note that the index should include the document that evinces your supply arrangement with Euro-Asian Oil, your main customer.
Following please find our proposed amended exhibit index, which includes the document that evinces our supply arrangement with Euro-Asian Oil (Exhibit 10.11):
Exhibit No.
Exhibit Description
2.1
Certificate of Merger dated February 15, 1994(1)
2.2
Plan and Agreement of Merger dated February 15, 1994(2)
2.3
Plan and Agreement of Merger(7)
3.1
Certificate of Incorporation of AU ‘N AUG dated February 15, 1994(1)
3.2
Certificate of Amendment to Certificate of Incorporation of AU ‘N AUG dated April 11, 1994(1)
3.3
Certificate of Amendment to Certificate of Incorporation of InterUnion Financial Corporation dated October 17, 1994(1)
3.4
Amended Certificate of Incorporation(8)
3.5
Articles of Incorporation of BMB Munai, Inc.(13)
3.6
Amendment to Articles of Incorporation of BMB Munai, Inc.(16)
3.7
Bylaws of InterUnion Financial Corporation(1)
3.8
Amended By-Laws(11)
3.9
By-Laws of BMB Munai, Inc. (as amended through January 13, 2005)(13)
3.10
By-Laws of BMB Munai, Inc. (as amended through June 23, 2006)(16)
3.11
Certificate of Amendment of By-Laws of BMB Munai, Inc. (as amended through March 26, 2008) (22)
4.1
Instruments Defining the Rights of Security Holders Including Indentures(2)
4.2
BMB Munai, Inc. 2004 Stock Incentive Plan(12)
4.3
Registration Rights Agreement dated December 2005(15)
4.4
Trust Deed Relating to U.S. $60,000,000 5.0 per cent Convertible Notes
due 2012(19)
4.5
Registration Rights Agreement dated July 13, 2007(19)
4.6
Paying and Conversion Agency Agreement dated July 13, 2007(19)
Mr. H. Roger Schwall
May 6, 2009
Page 3
4.7
Form of 5.0% Convertible Notes due 2012(19)
4.8
Indenture dated September 19, 2007(20)
4.9
Form of 5.0% Convertible Senior Note due 2012(20)
4.10
BMB Munai, Inc. 2009 Equity Incentive Plan(23)
10.1
ITM Software Development Agreement(2)
10.2
Letter of Understanding dated November 30, 1995(2)
10.3
Investment Management Agreement dated December 20, 1995(3)
10.4
Agreement between Havensight Holdings Ltd. and InterUnion Financial Corporation dated January 19, 1995(3)
10.5
Letter of Understanding dated September 26, 1996(4)
10.6
Letter Agreement dated January 7, 1997(4)
10.7
Amendment to Letter of Understanding dated April 16, 1997(5)
10.8
Services Agreement dated July 5, 2002(6)
10.9
Agency Agreement dated November 26, 2003(7)
10.10
Share Purchase and Sale Agreement dated May 24, 2004(9)
10.11
Contract #EO-EAO/30-12 for the Sales and Purchase of Crude Oil between Emir Oil LLP and Euro-Asian Oil AG*
10.12
Contract for Carrying Out Exploration of Hydrocarbon Resources*
10.13
Addendum No. 1 to Contract for Carrying Out Exploration of Hydrocarbon Resources*
10.14
Addendum No. 2 to Contract for Carrying Out Exploration of Hydrocarbon Resources*
10.15
Addendum No. 3 to Contract for Carrying Out Exploration of Hydrocarbon Resources(14)
10.16
Addendum No. 4 to Contract for Carrying Out Exploration of Hydrocarbon Resources*
10.17
Form Restricted Stock Agreement of BMB Munai, Inc. dated March 30, 2007 (17)
10.18
Form Employment Agreement(18)
10.19
Placement Agreement dated July 13, 2007(19)
10.20
Indenture dated September 19, 2007(20)
10.21
Consulting Agreement dated November 19, 2007(21)
10.22
Addendum No. 5 to Contract for Carrying Out Exploration of Hydrocarbon Resources(24)
10.23
Addendum to Contract #EO-EAO/30-12 Between Emir Oil LLP and Euro-Asian Oil AG*
10.24
Form Restricted Stock Agreement of BMB Munai, Inc. dated July 17, 2008 (25)
10.25
Employment Agreement – Leonard Stillman(25)
10.26
Revised Consulting Agreement dated September 16, 2008(26)
10.27
Addendum No. 6 to Contract for Carrying Out Exploration of Hydrocarbon Resources (27)
10.28
Addendum No. 7 to Contract for Carrying Out Exploration of Hydrocarbon Resources (28)
12.1
Computation of Earnings to Fixed Charges(29)
14.1
Code of Ethics(10)
21.1
Subsidiaries(29)
23.1
Consent of Chapman Petroleum Engineering Ltd., Independent Petroleum Engineers*
23.2
Consent of Hansen, Barnett & Maxwell, P.C., Independent Registered Public Accounting Firm*
23.3
Consent of BDO Kazakhstanaudit, LLP Independent Registered Public Accounting Firm*
Mr. H. Roger Schwall
May 6, 2009
Page 4
31.1
Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
31.2
Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
32.1
Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2
Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
*
Filed herewith.
(1) Incorporated by reference to the Registration Statement of the Registrant on Form 10-SB filed with the Commission on August 7, 1996.
(2) Incorporated by reference to the Amended Registration Statement of the Registrant on Form 10-SB/A filed with the Commission on November 14, 1996.
(3) Incorporated by reference to the Amended Registration Statement of the Registrant on Form 10-SB/A filed with the Commission on March 31, 1997.
(4) Incorporated by reference to the Amended Registration Statement of the Registrant on Form 10-SB/A filed with the Commission on April 15, 1997.
(5) Incorporated by reference to Registrant’s Annual Report on Form 10-KSB filed with the Commission on June 20, 1997.
(6) Incorporated by reference to the Registration Statement of the Registrant on S-8 filed with the Commission on August 30, 2002.
(7) Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on December 11, 2003.
(8) Incorporated by reference to Registrant’s Quarterly Report on Form 10-QSB filed with the Commission on February 20, 2004.
(9) Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on May 25, 2004.
(10) Incorporated by reference to Registrant’s Annual Report on Form 10-KSB filed with the Commission on June 29, 2004.
(11) Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on September 3, 2004.
(12) Incorporated by reference to Registrant’s Definitive Proxy Statement on Schedule 14A filed with the Commission on September 20, 2004.
(13) Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on January 18, 2005.
(14) Incorporated by reference to Registrant’s Quarterly Report on Form 10-QSB filed with the Commission on February 14, 2005.
(15) Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on December 29, 2005.
(16) Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on June 26, 2006.
(17) Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on April 5, 2007.
(18) Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on April 12, 2007.
(19) Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on July 19, 2007.
(20) Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on September 25, 2007.
(21) Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on November 21, 2007.
(22) Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on April 1, 2008.
(23) Incorporated by reference to Registrant’s Revised Definitive Proxy Statement on Schedule 14A filed with the Commission on June 23, 2008.
(24) Incorporated by reference to Registrant’s Current Report on Form 8-K filed with the Commission on June 25, 2008.
Mr. H. Roger Schwall
May 6, 2009
Page 5
(25) Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q filed with the Commission on August 11, 2