Nightmare in Boomtown

Dark Days: Seidenfeld enters the courtroom to await a verdict.

In October 2002, Seidenfeld called Zhunussov into his office for what would be a fateful meeting. The board had voted to end Zhunussov's consultancy and Seidenfeld was to deliver the message. Not only would Zhunussov no longer receive his fee, Seidenfeld told him, but he would lose access to company cars and telephones as soon as his contract expired at the end of the year. As Seidenfeld tells it, Zhunussov blew up: "You don't know all the work I do behind the scenes," the Kazakh said. "You'll never be able to run this company without me. You're going to have major problems that you never expected."

Roughly a year later, the revenge started. Zhunussov filed a complaint with the board, claiming Seidenfeld had taken a $43,000 "personal loan" from Arna and never repaid it. An internal investigation began immediately, and in February 2004, a PricewaterhouseCoopers audit found the claim baseless.

In the meantime, the Eagle Fund decided to sell its 83% stake in Arna, and Seidenfeld found British, Pakistani, and Russian bidders willing to pay north of $20 million. Zhunussov, who still owned 17% of the company, wanted to buy the controlling shares himself, and he wanted to pay $10 million for them. He threatened to do everything in his power to block any deals with outsiders, and eventually the board threw up its hands and sold the fund's stake to him, on March 3, 2004, for $15 million. It was $5 million more than he wanted to pay, and he held Seidenfeld responsible.

Immediately after the sale, Seidenfeld was fired. Two weeks later, the financial police issued allegations that he had billed the company $43,000 for calling- card equipment he never actually bought--and that he pocketed the money. Eighteen months later, Seidenfeld was sitting in prison in Siberia.

How much does it cost in Kazakhstan to have a man thrown in jail under false charges? "A couple of hundred thousand dollars," says one foreign investor in Almaty who agreed to talk to me anonymously. "Then you pay more to keep the misery going."

Pale and downcast, Seidenfeld arrived in cuffs at the Almalinsky regional court on a steamy mid-June day this year. Two prosecutors in bad suits sat behind a chipboard table. Seidenfeld's ex-wife, Dvorah, took a place in the back of the courtroom, where she quietly recited scripture and shot occasional glares at his fiancée, Natiya. The judge, Zaure Keikebasova, a fortyish woman in flowing maroon robes, flashed a smile at the Fast Company photographer. "Will I look good in the magazine?" she inquired.

The prosecutors, led by a ruby-faced man with a large mustache, fidgeted when it came time to ask questions, and at the end of each day they sauntered to a shiny black Range Rover parked opposite the court and sped off, puffing heavily on cigarettes.

"God is punishing him," she told me. "Mark! God wants you to wake up!"

The original embezzlement charges had been dropped while Seidenfeld was in prison (the supposedly nonexistent calling-card equipment had been in the office all along), but a whole new set of charges was quickly cooked up--this time alleging that he had overpaid for the equipment and kept the difference, about $26,000. As the trial proceeded, some prosecution witnesses seemed to get the old and new charges confused. And then some of the key players on the prosecution side just didn't show up. Zhunussov was subpoenaed, but he was away running a marathon in China, the prosecutors said, and then later vacationing at his holiday home in Kyrgyzstan.

The prosecution's case continued to unravel. "What did you think of the company having two sets of books?" a financial-police investigator asked former board member John Ward at one point. "As the company didn't have two sets of books," Ward replied, "I can't see how I can feel anything about it."

Seidenfeld rested his chin on his chest and closed his eyes. It was a farce.

"It's a Wild West atmosphere. You can't come in with U.S. or U.K. rules."

One day, Dvorah confronted Natiya outside the courtroom. "You witch! You home wrecker!" she yelled, and hurled dog-eared photographs of herself with the children on the ground. She later testified with a scathing account of her ex-husband's character, claiming he hadn't paid child support and had no interest in his family. I had been approached by Dvorah and an emissary from Zhunussov one night before the trial in the lobby of the Intercontinental Hotel, and she had thrown the same photos at my feet. "God is punishing him," she told me. "Mark! God wants you to wake up! We can only mourn the person he was." Zhunussov's messenger smiled at me. "Look at this woman," he said. "She has been abandoned. But Mr. Zhunussov is a family man. When the time is right to collect on this guy, she will get her money before Mr. Zhunussov takes anything." I asked Dvorah who had paid for her ticket here, and the man quickly interjected and said it was an "anonymous donor." He ended on an ominous note: "There are consequences if you cross the wrong person here."