It looks like February 6, 2020, marked the end of the special operation that we believe is being conducted by the First President of the Republic of Kazakhstan Nursultan Nazarbayev with the assistance of his nephew, Chairman of the Management Board of SWF Samruk-Kazyna Akhmetzhan Yessimov. Electing Jon Dudas, a foreign national, the Chairman of the Fund’s Board of Director testifies to this fact.

Let us quite the official press-release published under the title «Chairman of Samruk-Kazyna Board of Directors Is Elected» (text in bold by kz.expert).

«Jon Dudas has been appointed as the Chairman of the Board of Directors of Samruk-Kazyna JSC following the results of a Board voting process.

Note that, up until recently, the Prime Minister of the Republic of Kazakhstan served as the Chairman of the Board of Directors of SWF Samruk-Kazyna JSC.

In compliance with item 2 of Article 8 of the Law of the Republic of Kazakhstan „On Sovereign Wealth Fund“, the Chairman of the Board of Directors of the Fund is elected by secret ballot from amongst independent directors by a majority of votes.

This change complies with the new Development Strategy of the Fund approved by Elbasy in April 2018 as well as international standards for state-owned enterprises which provide for a clear separation of the functions of the state as the owner from the functions of the regulator.

As a result, since January 1 this year, the Board of Directors of the Fund consists of 7 members, 4 of them are independent directors Ong Boon Hwee, Kairat Mazhibayev, Jon Dudas, Alper Akdeniz as well as Kanat Bozumbayev, Aide to the President of the Republic of Kazakhstan, Ruslan Dalenov, Minister of the National Economy and Akhmetzhan Yessimov, CEO of the Fund».

In our opinion, the assurances that the changes comply with «the international standards for state-owned enterprises which provide for a clear separation of the functions of the state as the owner from the functions of the regulator» are but an attempt to muddy the water. If only because this question has never worried Akorda in the past and now is not really troubling it too. In view of this, the question arises — why Nursultan Nazarbayev removed the Prime Minister from the position of the Chairman of the Board of Directors of SWF Samruk-Kazyna and replaced him with a foreign national.

The firsе simple answer: because Jon Dudas is a highly skilled professional capable of managing Kazakhstan’s leading quasi-governmental holding better than Askar Mamin.

However, Jon Dudas’ biography shows that, even though he is undoubtedly qualified, he hasn’t held an impressive post in the course of his business career.

«1984-2012: BHP Billiton — Marketing Director for the Group’s energy portfolio, Director for Corporate Planning and CEO of the Aluminium division

2012 — till present: corporate adviser to multinational mining companies and global financial service providers

November 28, 2015 — December 2019: a member of the Board of Directors of NAC Kazatomprom JSC».

The second simple answer: the First President of the Republic of Kazakhstan as the Head of  the Fund’s Management Council finds it easier to work with a foreign top-manager than with Kazakhstan’s Prime Minister.

One must agree, however, that is does seem nonsensical that Nursultan Nazarbayev has established a foreign «buffer» between himself as the Head of the Fund’s Management Council and his nephew as the Chairman of the Management Board! What does he need it for?

Let us offer our own explanation.

The thing is that, today, time serves as the main limiting factor for Nursultan Nazarbayev. The First President cannot stop its march and is running out of it personally. With that, the Leader of the Nation fully realizes that, as soon as he passes on, all his relatives and allies will find themselves (regardless of who is in power at the H-hour or who seizes it later) in quite a difficult situation. Simply because they have what can be taken away. Even today, there is plenty of those wanting to do so, but tomorrow, their number is to grow exponentially. And, most importantly, no one in power will interfere, moreover, many will take over the leadership of this process.

And now, let us imagine the following scenario:

a) Akorda and the Library, and then the Government and the Parliament, realize that too much is owned by the state in the national economy and make a revolutionary decision to privatize the quasi-governmental companies not on one-by-one basis but altogether at the same time;

b) therefore, Akorda decides to immediately privatize SWF Samruk-Kazyna via, say, listing 50% minus one share in London (for instance) and, simultaneously, at the Astana International Financial Centre provided, of course, that the state remains in control of such an important structure;

c) Akorda’s revolutionary decision is successfully implemented by a big team of privatizers that includes Akhmetzhan Yessimov, Kayrat Kelimbetov and other top-managers within the space of, say, two years.

As a result of this unexpected turn of events, everyone receives the following:

• the Republic of Kazakhstan — a substantial sum of money whose size we are not even going to try and guess in order not to shock people; we will say, however, that it will constitute at least several billion dollars;
• SWF Samruk-Kazyna — private shareholders, the possibility to be listed at (at least) two trading platforms as well as improve on their attractiveness as both a borrower at external capital markets and an investor in the Kazakh economy;
• Nursultan Nazarbayev and the people he chose — the possibility to invest their multi-billion private capitals in big, reliable and profit-generating business as well as to protect their investments from confiscation inside Kazakhstan with the help of the already well-tried mechanisms including the British law and business-practices as well as the possibility to appeal to courts outside of the country’s borders.

One must agree that such in an ideal scheme for cardinally reducing the risks for Nazarbayev’s relatives and allies to be «defatted» after his passing.

And, in our opinion, this scheme will be implemented.

Of course, it does not guarantee the safety of the accumulated fortunes. However, if they are able to withstand the first attack (usually the most dangerous one), they will get an opportunity to bribe their way out of trouble. After all, if your fortune consists of 1-5-10-30 billion dollars, even having given away half of it, you shouldn’t worry how much black caviar to spread on your breakfast toast.

So, if our forecast is right, then the election of British citizen Jon Dudas the Chairman of the Board of Directors of SWF Samruk-Kazyna seems not just justifiable and logical but absolutely essential — in order to convince the London of Hong-Kong stock exchange to list the Fund’s shares.

Why is this so important?

Because the investors from amongst Nursultan Nazarbayev’s relatives and allies (and probably the First President himself), with their billions of dollars, pounds ands euros, can only hide at the place with huge turnovers that amount to tens and hundreds of billions of dollars, euros or pounds a day.