A Special op on selling 6,28% of SWF Samruk-Kazyna’s share in Kazatomprom at the London Stock Exchange was completed in a record-setting time — one day. Such a speed does not simply impress, it shocks. Let us tell you how the whole thing has been done.
The Kazakh bureaucratic vertical has been criticised by many and for quite some time. However, sometimes it acts so quickly and efficiently that one can but be struck with wonder. Usually this happens during disastrous times of a natural or manmade origin. For instance, after the Arys explosions or the flood in the Maktaaralsky district of the Turkestan region that happened in 2020. Or in the case of an acute political necessity as it happened with the renaming of the Astana city and a number of the streets and squares all around the country after Nursultan Nazarbayev’s resignation in 2019.
By way of yet another vivid example of this kind of bureaucratic efficiency, let us comment on the story with the listing of NAC Kazatomprom’s shares and GDRs that took place on June 2-3 at the LSE.
OPINION: Dariga’s Got Kazatomprom’s Shares
We have already touched upon this subject in our article. OPINION: Dariga’s Got Kazatomprom’s Shares in which we arrive at a conclusion that the stock had probably been bought by offshore companies and (or) some investment funds acting in the interest of Dariga Nazarbayeva, the former Speaker of the Senate and the Elbasy’s eldest daughter. Let us repeat these conclusions for you:
«These and many other articles in the foreign press clearly show that the clan of the Elbasy’s eldest daughter and grandson has lately been experiencing problems with the billions of dollars previously moved to Western banks. So, if 6,28% of Kazatomprom’s shares (or their biggest part) have really ended up in the hands of this clan, then several problems have now been solved with a single blow.
First, Dariga Nazarbayeva and Nurali Aliyev have removed a couple of million dollars from the UK regulators’ and secret services’ zone of action and, de-facto returned the money to Kazakhstan where it will be safe for now;
second, hid this fact from the public and the press;
third, satisfied their old interest in Kazatomprom JSC, a company with rather good business prospects, by obtaining a decent stock of shares in it (their previous attempts to do so in this sector made since the the time of Rakhat Aliyev is a subject of a separate research);
fourth, the Kazakh government has demonstrated to the people and the investors that the country’s stock market is, allegedly, alive;
fifths, the management of NWF Samruk-Kazyna has completed „The Complex Privatisation Plan for 2016-2020“;
sixth, the National Fund of the Republic of Kazakhstan has received a serious support in the amount of 206 $ mln or a just a little less if the listing expenses are to be detracted».
Now then, upon reading the text of the governmental Decree of June 3, 2020, on approving the decision of the Board of Directors of SWF Samruk-Kazyna in re the price, quantity and structure of the carve-out of NAC Kazatomprom’s equity, we have been reinforced in our view.
Let us quote this document below; thankfully, it is not very long (text in bold hereinafter by kz.expert).
«In accordance with Subsection 13) of Section 2 of Article 7 of the Kazakh Law of February 1, 2012, „On the Sovereign Welfare Fund“, the Government of the Republic of Kazakhstan hereby DECREES:
1. To approve the resolution of the Board of Directors of SWF Samruk-Kazyna JSC (attached below) on the price, the quantity, the structure of the carve-out of the NAC Kazatomprom’s equity (report of proceedings of June 3, 2020, № 173).
2. This Decree enters in force on the day it is signed».
Here are the passages that have caught our attention in the text of the Resolution of the Board of Directors of SWF Samruk-Kazyna on the price, quantity, structure of the carve-out of the NAC Kazatomprom’s shares. Let us quote:
«In accordance with Section 9 of Article 22-1 of the Kazakh Law of July 2, 2003, „On the Stock Market“; Subsection 19) of Section 3 of Article 8 of the Kazakh Law of February 1, 2012, „On the Sovereign Welfare Fund“; Section 1 of governmental Decree № 661 on some questions in re moving Kazatomprom’s shares into the competitive playing field; and Subsection 19) of Section 57 of the Corporate Charter, the Board of Directors RESOLVES:
1. To carve-out the ordinary shares of NAC Kazatomprom owned by SWF Samruk-Kazyna JSC (hereinafter Samruk-Kazyna), among other means, via the issuing and the listing of GDRs in which the aforementioned shares will serve as the base asset (with the ratio of one share equal to one GDR) on the following conditions:
1.1. in favour of the investors whose applications are satisfied based on the results of the speeded-up application submission:
1) the carve-out price: 5 230.81 (five thousand two hundred and thirty and eighty one hundredth) tenge per one ordinary share and US13 $ (thirteen) for one GDR;
2) the quantity of the carve-out: 1 030 815 (one million thirty thousand eight hundred and fifteen) ordinary shares and 14 865 608 (fourteen million eight hundred sixty five thousand six hundred and wight) GDRs;
3) the structure of the carve-out: a) no less than 20% of the total quantity of the carve-out in favour of the investors whose applications are satisfied based on the results of the speeded-up application submission will be offered for purchasing on the territory of the Astana International Financial Centre; b) the rest will be offered on the territory of foreign states (including the London Stock Exchange)».
Now let us objectively assess the speed of the special op on the sale of 6,28% of SWF Samruk-Kazyna’s share in Kazatomprom JSC — it does not simply impress, it shocks.
Here is how it happened.
- on June 2, 2020, NAC Kazatomprom informs the public on its intention to conduct a listing of its shares and GDRs;
- on June 3, 2020, the Board of Directors of SWF Samruk-Kazyna passes a resolution on the price, the quantity and the structure of the carve-out of NAC Kazatomprom’s shares;
- on June 3, 2020, the Government of the Republic of Kazakhstan issues Decree 350 by which it approves the resolution of the Board of Directors of SWF Samruk-Kazyna on the price, the quantity and the structure of the carve-out of NAC Kazatomprom’s shares;
- on June 3, 2020, NAC Kazatomprom’s shares and GDRs are listed at the London Stock Exchange;
- on June 3, 2020, NAC Kazatomprom informs the public, via its official website, that the listing has taken place and makes an announcement in the press.
In our opinion, no state existing in the world today (whether developed or developing, western or easters, authoritarian or democratic) can be compared with Kazakhstan in terms of the speed, the vigorousness and the efficiency of its bureaucratic machine. For, according to those same bureaucratic norms, every resolution of Samruk-Kazyna’s Board of Directors and every Decree of the Kazakh Government requires at least three ratifications, reviewals and assessments via certain divisions as well as the drawing up, the signing and the registering.
And this — without taking into consideration the time needed for the papers to be transferred from one agency to another albeit within the limits of a single city.
Even if, in this instance, they have dealt with the e-document management, the speed of the process is still astounding. Usually the preparation process takes up to several weeks; or several days at the very least. But, in this case, everything was completed in a day including the listing of the shares and the GDRs at the London Stock Exchange.
In view of this, we got curious what had served as the driving force for those who participated in this special op — the supernatural forces, the uber-urgent political necessity or a forceful kick?