We are continuing project “Unmasking Nazarbayev”. This time, we will talk about how offshore Energy Asia (BVI) Limited became the owner of shares in two NAK Kazatomprom-affiliated companies of which it then disposed for a solid price of half a billion dollars.
But first, let us recall that, on May 24, 2022, we published photocopies of the documents showing how Mukhtar Dzhakishev, when in prison, refused to meet with a Kazatomprom representative and be handed over the materials of the legal claim.
Then, in our publication ”The Story of Marubeni/Kazatomprom Deal. Part 1”, we released a photocopy of a document that served as the reason for filing this claim.
We are talking about the share purchase agreement as part of which Japan’s Marubeni Corporation agreed to buy shares in NAK Kazatomprom’s two affiliated companies: Baiken-U LLP and Kyzylkum LLP through an offshore intermediary.
Here is a quote from the aforementioned publication.
“On the twenty-something of December 2006, offshore company Swinton Investment and Finance S.A., PO Box 146, Road Town, Tortola, British Virgin Islands signed the sale and purchase agreement with Marubeni Corporation, 4–2, Otemachi 1-Chome, Chiyoda-ku, Tokyo, Japan
Here is what the scheme was.
The seller owned all the shares of offshore company Energy Asia Holding Ltd that, in its turn, owned 50% of Energy Asia (BVI) Limited.
The seller also owned 94% of offshore company Glendale International Investment LTD, PO Box 3175, Road Town, Tortola, British Virgin Islands that also owned 50% of Energy Asia (BVI) Limited.
Now then, Marubeni Corporation bought from Swinton Investment and Finance S.A. all the shares of Energy Asia Holding Ltd that, as you recall, owned 50% of Energy Asia (BVI) Limited. The purchase was made for the solid price of $540 bln.
Let us say from the start – we do not think that the Japanese investor overpaid. After all Energy Asia (BVI) Limited owned shares in two Kazakh uranium mining companies affiliated with Kazatomprom – 95% in Baiken-U LLP and 40% in Kyzylkum LLP”.
And now we will relate how Energy Asia (BVI) Limited became the owner of the shares in NAK Kazatomprom’s two affiliated companies.
This historic event took place on August 28, 2006, when President of the national company Mukhtar Dzhakishev and L. Benjamin, the offshore company representative, signed two agreements.
The first one was the agreement of sale and purchase of 40% of Kyzylkum LLP shares for US$180 mln. The second one was the agreement of sale and purchase of 95% of Baiken-U LLP for US$360 mln.
Attached to this article, you will find a photocopy of the Baiken-U sale and purchase agreement. We see no point in presenting the second agreement since the text of both documents are identical aside from the name of the firms, the size of shares owned by the national company, the size of the shares it had sold and the amounts of the transactions.
In Section 2 “Purchase and Sale” of these agreements, it is stipulated that the monetary funds in the amount of $360 and $180 mln, respectively, are to arrive in the seller’s account before March 31, 2007.
The documents we have in our possession show that US$540 mln had arrived in NAK Kazatomprom’s accounts in due time.
The fate of this money can be traced from the document published on NAK Kazatomprom’s official website. It is titled “The Consolidated Financial Statement as of December 31 of 2009, 2008 and 2007”.
We believe this document is quite unique since it was prepared under the guidance of the then Vice President of Economy and Finance of Kazatomprom Pirmatov G.O. who currently chairs the National Bank of the Republic of Kazakhstan.
The thing is that Pirmatov G.O. came to NAK Kazatomprom after Mukhtar Dzhakishev had been arrested and put in prison and the new leadership of the national company seemed to have ordered him to hush things up to the maximum degree.
Since, unlike BTA Bank JSC, NAK Kazatomprom did not sink to the bottom, it looks like Pirmatov had faced up to the challenge although the fact that the uranium deposits and the industrial assets inside the country were much harder to steal than the money on bank accounts and the assets located in other countries was undoubtedly a great help to him.
Nonetheless, in our opinion, the aforementioned “Consolidated Statement” is to be believed only to a point. Since this is a subject for a whole series of publications that requires time to prepare, we shall leave it for the future.
Now then, Kazatomprom’s financial statement shows that “in 2007, the inflows from the disposal of investments (excluding the retired funds) (see Page 7) constituted 72630963 thousand tenge, in other words, 72.6 bln tenge”.
Since we do not have a copy of the transfer order or the cash flow statement, we do not know the exact day of the money arrival. Therefore, we can only venture a suggestion: given that the US dollar exchange rate as of the end of May 2007 constituted about 124 tenge, we are talking roughly US$583 mln.
This money was used for “purchasing investments available for sale” in the amount of 65943012 thousand tenge. Which constituted US$540 mln that was spent on buying the shares of two Toshiba-affiliated companies.
Those wishing to know more about this deal that is outside of the scope of our interests, may read about it on the Internet (this case has been well-publicized) as well as study Page 73 of the “Consolidated Statement”.
You will find the photocopy of the Baiken-U share purchase agreement by clicking on the link below
04-Share Purchase Agreement between KAP and EAL for BU.pdf
To be continued
