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Kazakhstan’s state oil company is seeking to tighten control over its UK-listed subsidiary over the opposition of its independent directors, setting the stage for another boardroom battle at a Kazakh company in London.

National Company KazMunaiGas, which is 100 per cent owned by the Kazakh state, on Friday called an extraordinary general meeting to revise the relationship agreement between it and KazMunaiGas Exploration Production, the London-listed subsidiary in which it holds a 63 per cent stake.

It also offered to buy out any minority shareholders who were unhappy with the changes.

The independent directors of KMG EP said they would resign if the proposals were approved, arguing that they would “significantly weaken the protections afforded to independent shareholders”.

The KMG EP directors said the proposed buyout price of $7.88 per global depository receipt — a 12.6 per cent premium to Thursday’s closing price — “significantly undervalues the company”.

The tussle between the state oil company and its subsidiary echoes the long battle between miner Eurasia Natural Resources Corporation and its UK independent directors. ENRC departed the London market in 2013 under a cloud of boardroom battles and — in its case corruption allegations — dealing a hefty blow to Kazakhstan’s international reputation.

The fight will also will be a key test of Kazakhstan’s approach to international investors as it prepares for an ambitious privatisation programme. Last year the central Asian country announced plans to float minority stakes in some of its largest companies, including NC KMG.

The relationship agreement between the state oil company and its subsidiary was drawn up to protect minority shareholders when KMG EP listed in 2006 and gives significant power to the company’s three independent directors.

Now NC KMG is arguing that changes to the agreement are needed to reduce bureaucracy and to allow it to push through plans to make KMG EP’s operations more efficient.

It said the alterations would “maintain, and in some areas significantly enhance” protections for minority shareholders. The changes require the approval of half the minority shareholders voting at the EGM to be held on August 3.

“KMG EP is hampered by excessive bureaucracy, with too many layers of decision-making and considerable duplication,” the chairman and chief executive of NC KMG said in a joint letter to shareholders on Friday.

KMG EP, which owns several Soviet-era oilfields in Kazakhstan and is the country’s third-largest producer, has suffered a drastic decline in profitability amid the fall in oil prices, reporting a $288m operating loss last year.

However, it holds $3.1bn of cash on its balance sheet, while its parent NC KMG is highly indebted and last year was forced to seek a bailout from its parent sovereign wealth fund in order to avoid breaching debt covenants.

NC KMG offered to buy out minority shareholders in KMG EP in 2014 for $18.5 per GDR, but ran into stiff resistance from the latter’s independent directors over the price of the deal.

As oil prices tumbled last year, NC KMG withdrew its bid but began putting increasing financial and operational pressure on its subsidiary, people close to KMG EP say.

Directors representing the parent company on KMG EP’s board voted to pay no dividend this year, rejecting proposals from the company’s management and the recommendation of the independent directors. And at the start of this year, the parent company slashed the prices it paid KMG EP for supplies of oil on the domestic market. It has not paid a settlement to KMG EP relating to a dispute on domestic pricing last year, according to two people familiar with the matter.

NC KMG said it was “not seeking to acquire any significant additional holding in KMG EP through [the buyout] offer”, but simply to give a way out to shareholders who did not support the proposed changes.

China’s sovereign wealth fund, CIC, will have a key role in the vote as it holds an 11 per cent stake in KMG EP out of a total 37 per cent held by minorities.