Britain's new Bribery Act risks diverting a second wave of Kazakh companies seeking to raise money from the London Stock Exchange, according to bankers and businesses considering listing.
"I expect this Act to severely affect the attractiveness of the London market," said a banker in the commercial capital Almaty, who helped arrange one of the country's largest pre-crisis London equity fundraisings. "Any valuation premium will not be enough to offset the additional red tape, and the significant potential risks."
Ten Kazakh-controlled companies listed in London between October 2005 and December 2007, ranking the oil and mineral-rich country second only to Russia in the volume of equity its companies raised on the London market.
The nine remaining companies have a combined market capitalisation of more than $18bn and feature two members of the FTSE 100: miners Kazakhmys and ENRC.
But, since the end of last year, Kazakh companies have been increasingly considering Hong Kong listings. The Bribery Act, which is set to come into force in April after consultations with British companies this month, is causing further doubt.
Under the Act, company directors can be liable for improper payments, even if they were made by third-party contractors and the directors themselves were completely unaware of them.
The managing director of a Kazakh gold company considering a London listing said: "The legislator needs to make up their mind. Do they want to promote the market and make people interested, or do they want to make life more difficult?
"It's not as if we're planning to do bribery all the way through, so we won't come. But if it's very onerous, it will have to be taken into account when we're deciding whether to come."
A Western mining executive who has long worked in Kazakhstan said: "This act is simply incompatible with the reality of doing business in this country. People will just end up putting all of the compliance systems in place, and then ignore them."
Kazakhstan ranks 120th on the index of anti-corruption organisation Transparency International Index, meaning it is perceived to be less corrupt than all the other former Soviet Union countries, apart from Moldova and the Baltic states.
But winning deals and fending off over-zealous local officials still often means making payments.
MAN Turbo, a German turbine company, was last year fined €150.6m by a German court for bribing a local official to win a gas infrastructure contract.