The bragging of KMG International’s top-management that, for the first time in twelve years, the company has paid the dividends in the amount of 15 $ mln to the parent structure looks not simply like a cynical deceit of everyone and their brother but a blatant mockery of the common sense. Let us explain why it is so and who is hiding behind all this.
On October 28, 2019, KMG International, KazMunaiGas NC’s affiliated structure, made an announcement about the first-time-in-history dividend payment in the amount of US15 $ mln to the parent company.
With that, KMG International considers the reduction of the external banking debt by 524 $ mln one of its main achievements. «We have managed to achieve it thanks to the measures taken on increasing the company’s financial stability during the period from 2012 to 2019». They have also managed to repay the past due debts to the oil suppliers in the amount of 244 $ mln and even more so: «Having repaid the 200 $ mln debt in 2019, KMG International has freed up the shareholder’s corporate guarantee that had served as a collateral for the external liabilities».
The Forbes Kazakhstan publication about KNG International’s successes that we have cited is not the first and, by the looks of it, not the last one devoted to the topic. Those who wish to learn more on that can, for instance, read this extensive interview that KNG International’s Managing Director for International Projects Azamat Zhangulov gave to the magazine in Romania.
Judging by this activity, the management of the Romanian branch of KazMunaiGas NC is holding an advertising campaign both in Kazakhstan and beyond for the purpose of either increasing its market attractiveness or because of the possibility to spend the turned-up money.
In our opinion, it is indeed the time to be happy about the fact that KazMunaiGas’ foreign affiliated structure has finally started paying the dividends; moreover, this is happening for the first time since 2007 when the national company bought its Romanian asset called Rompetrol.
However, what is much more important is to understand how KazMunaiGas NC has become involved in this shady business-project and who exactly is responsible for that.
Obviously, in modern Kazakhstan, neither Akorda and «the Library» not their subordinated law-enforcement structures including the Public Prosecution Office and the National Security Committee will see to it simply because this subject is extra-sensitive for the First President and the Leader of the Nation Nursultan Nazarbayev as well as for his son-in-law, President of the Atameken National Entrepreneurs Chamber Timur Kulibayev.
In our opinion, the total amount of the Kazakh investments in the Romanian project including the expenditures on the Rompetrol purchasing and the support of its financial standing, the production upgrade and the preservation of the spot on the market surpasses US4 $ bln.
With that, one billion dollars has disappeared without a trace via a transit through Rompetrol’s former owner. According to some reports, it ended up in the hands of one of Timur Kulibayev’s influential relatives.
Amid all this, the bragging of KMG International’s management that the company has paid the dividends in the amount of 15 $ mln to its parent structure for the first time in 12 years seems like a blatant humiliation of the Kazakhs and mockery of the common sense. In the civilized countries, in other words, in the states with the market economy and the democratic political system, such announcements immediately become a reason for very big, extra-scandalous and rather serious in terms of their consequences investigations involving the parliament, the political parties, the government and all the echelons of power. And they mandatorily result in a high-profile legal trial and a guilty verdict.
Unfortunately, it does not work like this in Kazakhstan. And even if the chances for Timur Kulibayev and his team to end up at the defendants’ bench have grown, first of all, due to the escalation of the intra-elite conflicts in the country, however, these chances still remain miniscule. Thus, the Leader of the Nation’s son-in-law and the holder of his assets may not fear to be hold responsible for their previous actions.
Here, by the way, we are talking not only about the Romanian shady undertaking but also about the corporate raiding against the Statis, the sale of the oil-and-gas enterprises to Chinese investors while collecting billion dollars in commissions, the theft of the two assets previously belonging to BTA Bank JSC and much, much more.
So, if the Kazakh society wants to have real changes in the country, the time has come for it to start sorting out how, say, Timur Kulibayev and other Nursultan Nazarbayev’s close relatives and allies have become billionaires and multi-millionaires. This is not as hard as it might seem at the first glance since it has happened not in outer space but here, on this earth.
At this point, we can only register that the monopolization of the national economy by the members of the country’s main elite clan is not simply going off the charts but, one can say, has set a world record:
- billionaire Timur Kulibayev and his wife billionaire Dinara Kulibayeva still control the oil-and-gas sector,
- the trio of the Eurasian billionaires — Alexander Mashkevich, Alidzhan Ibragimov and Patokh Shodiyev as well as billionaires Bulat Utemuratov and Vladimir Kim control the mining sector,
- multimillionaires Dariga Nazarbayeva and Nurali Aliyev control the communication sector.
The given picture is repeated in literally every sector of the national economy with rare exception that only confirms the main rule of doing business in Kazakhstan — in order to become successful economically, one must first become strong and influential politically.
And until this mechanism and this direct correlation is not broken down, the possibility of the transition from the authoritarian political system and the super-presidential vertical to a democratic system and parliamentary republic will remain but a naïve dream.