Prosecutors Interfere in the BCC Scandal

We cover and comment on the confrontation between Bank CenterCredit JSC and entrepreneur Bekzhan Kulbayev quite often. And not only because this confrontation stands out among the other high-profile business-conflicts. In our opinion, this also serves as a remarkable illustration of the frequently used practice of the improper relationships between a bank-creditor and a businessman-borrower when the former abuses their authority.

In order not to make the reader search for our previous publications on the subject, let us remind you of the gist of the case by citing our material How CenterCredit Conned a Borrwer.

«So, here is the story. Four Kazakhs had decided to buy the limited liability company that is the only shareholder of the oil field’s operator in the Aktobe region. The seller wanted US 6 $ mln for the asset. To obtain such a substantial sum, the buyers asked BCC for a loan. At first, the bank’s management agreed to provide the loan, but then, for some reason, started to delay the transaction.

When the situation became critical, BCC’ Chairman Galym Kusainov suddenly demanded (unofficially, of course) that the potential borrowers gave 35% of their share in the purchasing asset to the bank without compensation. Since the transaction was on the verge of falling through and the buyers were at risk of losing the already paid advance money (US 500 $ thousand), they had no choice but accept the deal.

The story, however, does not end here. At the signing of the loan agreement, Kusainov voiced yet another strange demand. The debtors had to borrow not US 6 $ mln but US 12 $ mln. The additional 6 $ mln were to be handed over to the company affiliated with the bank’s key owner Bakhytbek Bayseitov.

To appease the utterly shocked borrowers, Bayseitov had personally guaranteed the safety of the transaction and the return of the 6 $ mln. The document was signed in Almaty on June 26, 2018.

However, something went wrong and, as a result, the four people that borrowed 12 $ mln from BCC and handed over 6 of them to the silent participant of the transaction on Bayseitov’s word and statement of liability have found themselves up in the air. They cannot get back these 6 mln from either the company affiliated with Bakhytbek Bayseitov or from the man himself. Moreover, BCC’ management is initiating an enforced recovery of the entire debt from the limited liability company that has received the loan. Thus, the enterprise may eventually come under the control of the bank».

Later, in the article The End’s Just Around the Corner of September 27, 2019, we predicted that, in the National Bank of the Republic of Kazakhstan and its subcontractor in the Asset Quality Review project get curious about the Bank CenterCtredit’s credit dossier, they are in for some «great discoveries».

It looks like, after our publications, BCC’s management has also arrived at the same conclusion. Based on the information provided by our insiders, the key BCC participants of the business-conflict including Bakhytbek Bayseitov and Galim Khusainov have urgently begun «saving» the situation. Which includes paying off the dubious loan in the amount of 6 $ mln given to a shell company.

They have also attempted to «get» the opponent via the law-enforcement agencies and with the help of the informal pressure exerted through the environment.

Galim Khusainov scarcely expected the situation to unfold this way 

However, BCC’s activities in its confrontation with Bekzhan Kulbayev do not end here. Recently, we have been handed over some «unique» papers from which it follows that the people directly responsible for the operation of depriving the entrepreneur of the LLP (which, undoubtedly, should be classified as raiding) have also committed a forgery. And with the approval and the direct involvement of BCC’s top-management, too. The «raiders» believe this should allow them to significantly improve their standing in the legal confrontation with Bekzhan Kulbayev that is now unfolding not only in Kazakhstan but beyond its borders as well.

Obviously, establishing the fact of forging the documents (including the banking documents) is a task not for journalists or political experts but for law-enforcement agencies. And it does look like, at the end of the day, they will have to deal with BCC’s top-management. This, among other things, is evident from the fact that Kazakhstan’s Public Prosecution Office has interfered in the situation.

Specifically, on October 11, 2019, Shalabayev S.R, the Chief of the Criminal Prosecution Service, signed an order demanding to continue the pretrial investigation and refusing to satisfy the claim (we have it at our disposal).

From the Order, it follows that, according to the statement of Kulbayev R., on February 13, 2019, the Almaty Police Department started the pretrial investigation related to the abuse of authority by Bank CenterCredit’s top-managers Bayseitov B. and others (in accordance with Part 2 of Article 250 of the Kazakh Criminal Code). But then the criminal case was closed in accordance with Subsection 2 of Part 1 of Article 35 of the Kazakh Criminal Procedure Code, in other words, due to a lack of evidence. However, in the course of the research of the case materials, the prosecutors have established that (quoting): ‘…the decision on closing the case violates the stipulations of Article 24 of the Kazakh Criminal Procedure Code and was made prematurely, thus, it is subject to reversal due to the lack of the depth and comprehensiveness of the investigation».

Particularly it has been established that «in the course of the pretrial investigation, the allegations of claimant Kulbayev B. in the part of the unlawful acquisition of a share in FLAMMA LLP by Chairman of the Management Board of BCC JSC and member of the bank’s Board of Directors Ushbayev A. without actual payment have not been verified».

We are not to continue quoting from the document signed by the Chief of the Criminal Prosecution Service of Kazakhstan’s Public Prosecution Office, but we will underscore that the forgery of the documents that has likely been sanctioned by Galim Khusainov and perhaps Bakhytbek Bayseitov is drastically increasing the possibility of the business-conflict with Bekzhan Kulbayev moving into the legal domain and ending with the conviction of the raiders.

Of course, this story cannot but affect Bank CenterCredit JSC especially if the National Bank of Kazakhstan and its subcontractor in the Asset Quality Review project will «dig up» something else that will show that the bank’s real financial standing is not as trouble-free as it follows from its reports. For how else can we explain why the principal shareholders and the top-managers of the financial institute dare to carry out such seemingly strange operations as attempting to seize someone else’s business and provide themselves with a practically unrecoverable loan via temporary giving it to a client?


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