In our article based on the Problem Loans Fund’s (PLF) 2017 consolidated financial statement, we have presented a political assessment of BTA Bank’s assets purchase and showed by how much their price was inflated. We are talking of nothing less than $7 bln.
We will recall that the audit report prepared by Russell Bedford A+Partners states that the fair (market) price of the purchased assets constitutes not more than 268 bln tenge even though, in 2017, they were purchased for 2640 bln tenge that came from the tax payers’ money. The difference constitutes the number with nine zeroes (see Who’s Responsible for the Crook Business?).
When studying the aforementioned statement, we have noticed the clear desire on the part of the PLF management to relieve themselves of any responsibility for this deal.
To confirm our observation, let us cite the following facts (text in bold by kz.expert).
1. In the financial statement of December 31, 2017, the biggest part of the purchased BTA Bank’s distressed assets was reflected only in the section “Liabilities” under the entry “The Qualifying Distribution Reserve” (2667 bln tenge as of December 31, 2017; addition against December 31, 2016, constitutes 2540 bln tenge).
2. On page 39 of “The Notes on the Separate Financial Statement”, it is underscored that the cash disbursement can only be performed if the Fund presents the documentation package that “includes the Fund’s Shareholder’s decision on completing the deal on the purchasing of the non-performing loans from second-tier banks”.
3. On the same page, it is stated “In Accordance with the framework agreement of June 2, 2017, signed by the Government of the Republic of Kazakhstan, the Ministry of Finance of the Republic of Kazakhstan (MF), Halyk Bank of Kazakhstan, Kazkommertsbank (KKB), BTA Bank (BTA), the Fund and a number of other parties, in accordance with the MF order of June 29, 2017, the assets selling-purchasing agreement was signed between the Fund and BTA. Based on this agreement, the Fund had paid the buying price of 2.639.771.120 thousand tenge on the condition of 100% up-front payment. BTA transferred the ownership of its assets to the Fund in accordance with the assets list approved by the Government, the MF, the National Bank of the Republic of Kazakhstan, Halyk Bank and KKB”.
4. On page 40 of “The Notes on the Separate Financial Statement”, it is stated that the list of the purchased BTA assets includes, apart from the shares of Al Sakr Finance JSC, 100% of the shares of Estate Management Company JSC and Kazkom Realty LLP, the property on BTA’s balance and the debt claim on the finance projects mentioned in Appendix 13.
5. On the same page, it is underscored that “In accordance with the framework agreement, the bying price of the assets purchased by the Fund was set based on the book value of the seller’s assets without their evaluation. And, just below, it is noted that “the final total market/fair value of the purchased assets constituted 267.739.715 thousand tenge as of the moment of the purchase.
6. On page 41 of “The Notes on the Separate Financial Statement”, in is stated that “The Management renders the terms of the BTA purchasing deal non-market and carried out exclusively on the Shareholder’s decision and, therefore, has recognized the difference in the amount of 2.372.031.405 thousand tenge between the fair price of BTA’s assets at the moment of the signing of the deal and the buying price as “The Qualifying Distribution Reserve”.
7. On Page 51 of “The Notes on the Separate Financial Statement”, it is clarified how much money the Problem Loan Fund overpaid to BTA Bank: the difference between the fair price and the actual price of the purchased distressed assets, as of December 31, 2017, constituted 2372 bln tenge against zero as of December 31, 2016.
In our opinion, all these details of the deal show that the PLF managers realize full well how precarious their situation is. This is exactly why they are acting in a proactive mode, in other words, they are already shifting the blame onto the higher authorities and not waiting for the time when they will play the role of scapegoats.
All in all, we believe, Akorda’s special op on Halyk Bank’s rescue performed under the pretext of solving the problems of Kazkommertsbank and BTA Bank when they instantaneously “spent” the sum that was significantly surpassing the country’s losses resulting from corruption and the low-quality work of the governmental officials and the quasi-governmental sector had instantly devalued all the Government’s longstanding efforts to increase the effectiveness of the national economy.