BTA Bank’s Forgotten Assets

The infamous BTA Bank case that is still being used by Akorda in its political battle with Mukhtar Ablyazov may be also employed in the domestic inter-elite fights. The First President’s son-in-law Timur Kulibayev and Kazakhstan’s former Prosecutor General Askhat Daulbayev are on the list of its potential victims.  

This article has been written following S& P Global Ratings’ announcement on assigning its ‘B/B’ rating to Kazakhstan-based Novacom Corporation LLP and on confirming its ‘B/B’ BTA Bank ratings; the outlook is stable.

Let us quote some passages from the rating agency’s press-release (text in bold by

«We believe Novacom Corp. LLP, a new holding company established by BTA Bank’s majority owner, will be an integral part of the group and increase its stake in BTA to at least 97% from the current 29% in the next 12 months.

We are assigning our 'B/B' issuer credit ratings to Novacom, and affirming our 'B/B' issuer credit ratings on BTA Bank.

The stable outlook reflects our expectation that the group will gradually reduce its problem assets, with sufficient cash proceeds to cover liquidity needs, and consolidated debt not exceeding 200 $ million».

«Novacom is a newly established holding company of BTA that is wholly owned by Mr. Kenges Rakishev, who is transferring his 97% stake in BTA to this entity. Novacom currently owns just 29% of BTA, with the rest under its management, but we understand it will hold all 97% in mid-2020.

In addition, we understand that Novacom has issued bonds of Kazakhstani tenge (KZT) 40 billion on the Kazakhstan Stock Exchange and will raise a further KZT25 billion to participate in a real estate development project. Novacom and BTA will provide part of the working capital for this project».

«A negative rating action may follow if, contrary to our expectations, we see the group failing to dispose of repossessed assets in the next 12-18 months. This would lead to an erosion of cash cushions and the need to attract additional debt, resulting in a higher-than-expected loan-to-value ratio. This may also be driven by corporate restructurings or the need to support weaker companies under common control. Underperformance of large projects, including the new residential real estate development, could also trigger a negative rating action. We could also lower the ratings if Novacom raises significant debt at the subsidiary level, deviating from our base-case scenario and making its debt liabilities structurally subordinated».

Let us remind you that the news on Kenes Rakishev (a son-in-law of Kazakhstan’s current Ambassador to Russia Imangali Tasmagambetov) transferring a part of his BTA shares to the new business-structure which he controls too was first learned on May 23, 2019, after the publication of the announcement on changing the structure of BTA Bank shareholders with 10 and more percent of voting shares.

In view of this, several questions must be asked. And the first one of them is — why has Kenes Rakishev created Novacom Corporation LLP holding structure, why has he already transferred 29% of BTA Bank there and why is he going to give it the remaining 68%?

In our opinion, by doing so, Kenes Rakishev (and Imangali Tasmagambetov’s family in general) are trying to, first, «bury» BTA Bank JSC and its high-profile scandalous story in the information space, second, distance themselves from the associated problems that, in the future, may float to the surface and do a serious damage to them personally as well as to their business-interests.

The fact that the latter is quite possible is beyond doubt. If only because the BTA case is still being used by Akorda in its political war with Mukhtar Ablyazov who, as of today, is known as the most famous opponent of Nursultan Nazarbayev’s regime and it is to Ablyazov’s benefit to dispose of these accusations.

Apart from that, the said case may and probably will be used in the inter-elite fighting.

For example, it may be used, given the right circumstances, against billionaire Timur Kulibayev, (the First President’s son-in-law and the head of the Atameken National Entrepreneurs Chamber) or member of Kazakhstan’s Constitutional Council Askhat Daulbayev who, in the past, served as the Prosecutor General of Kazakhstan.

The thing is that, according to the documents that we have at our disposal, Timur Kulibayev has, by some miracle, become a co-owner of two big assets that had taken loans from BTA Bank during the time when Ablyazov was its majority shareholder.

Note that this fact was known to many including the future top-managers of the bank (Anvar Saydenov, Arman Dunayev, Nikolay Varenko) as well as the officers from the operative and investigative groups. Nonetheless, the said assets were «forgotten» by them, so they were left out of the legal claims and the operative and investigative actions.

Another cluster of problems has to do with the use of BTA’s resources in the legal battle with Mukhtar Ablyazov. The total amount of these expenditures, by our estimates, has long surpassed half a billion dollars. And, with that, we believe that there is 100% likelihood that numerous embezzlements including via overvaluing the prices for the legal services provided by the Kazakh and foreign firms did take place. 

This means that, apart from former Chief Assistant Prosecutor General Ulugbek Maksatbekuulu and his wife, his former bosses can also be hold liable, first of all, we are talking about Kazakhstan’s former Prosecutor General Askhat Daulbayev.

Since BTA Bank’s case is dribbling along for 11th year and is still far from being resolved, it is clear that it is turning into a problem not only and not so much for Mukhtar Ablyazov but for those who has been at war with him during all these years.

For the actions of the latter will unavoidably be reviewed and reevaluated when the transition of supreme power in the country is completed. And then it may very well turn out that the number of the state officials held liable for the embezzlements and abuse of authority in the course of the war against Mukhtar Ablyazov is comparable to the number of the former bank’s employees who were also held responsible one way or another.


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