Kaspi.kz’ Price of Success. KZ.expert’s Take

On October 14, 2020, the Kazakh media resources informed on the overwhelming success of Kaspi.kz at the London Stock Exchange (LSE). However, we believe that there should be no cause for pride and happiness. Now then, what is hidden behind this pretty exterior? Or, to be more precise, who?

Here is how the Forbes.kz website titles its publication on the said event «Kaspi.kz Lists Shares and Becomes the Most Expensive Company in the History of Kazakhstan»; and here is the title of the article published by the Capital Centre of Business Information — «Kaspi.kz Lists Shares at the LSE. The Fintech Holding Attracts $1 bln».

Note that both resources reference the Bloomberg publication that says that Kaspi.kz has listed its shares at the London Stock Exchange and at the top of its prize range at that — 33.75 $ per GDR.

The size of the listing constituted US1 $ bln. With that, Kaspi.kz’ shareholders represented by Baring Vostok Capital Partners (Asia Equity Partners Limited and Baring Vostok Nexus Limited), Goldman Sachs (ELQ Investors II Ltd), Vyacheslav Kim and Mikhail Lomtadze acted as the sellers of the shares.

There can be no doubt that this is a truly outstanding success of a company with the Kazakh roots. The only question is how truly market-oriented this success is. The official data indicate that, as of July 1, 2020, the list of Kaspi.kz JSC shareholders included: 

  • Kim V.K. (73201371 ordinary shares or 36,69% of all the listed shares);
  • The Baring Vostok Funds (55311058 and 27,72%, respectively);
  • Lomtadze M. (49835353 and 24,98%, respectively);
  • Goldman Sachs (7672186 and 3,85%, respectively).

It is they who have received or will receive US1 $ bln on their accounts from the listing.

Note that Kaspi Bank JSC serves as the main (we would even say fundamental) asset of Kaspi.kz JSC. As of July 1, 2020, the fintech holding, through KASPI GROUP JSC, owned 17347729 ordinary shares and 321223 preferred shares of the bank, in other words, 88,34% of the listed shares. Without Kaspi Bank JSC, the entire fintech superstructure would not have been be as efficient and profitable.

And here is what makes us doubt the market-oriented nature of the Kaspi.kz’ LSE listing.

The thing is that, previously, Kayrat Satybaldy, Nursultan Nazarbayev’s nephew, was one of the major shareholders of Kaspi Bank JSC and provided it with political protection. Later, however, he’d disappeared somewhere. 

We have written on this subject a number of times, for instance, on February 15, 2019, in the material «On Satybaldy and His Exit from Kaspi Bank» and, on June 12, 2019, in the article «Kaspi Bank’s Big Success». Let us quote several paragraphs from the first publication.

«Kaspi Bank used to be under the control of Kayrat Satybaldy, Nursultan Nazarbayev’s nephew, but now, to our surprise, he is absent from the list of the shareholders. And the reasons why the President’s relative has left the bank business are unknown. Neither he nor Kaspi Bank or Satybaldy’s key partners, namely Vyacheslav Kim and Mikhail Lomtadze, have said anything on the subject. 

Kayrat Satybaldy’s leaving Kaspi Bank would seem logical if the bank was experiencing difficulties or had a poor financial standing thus ceasing to be desirable from the business standpoint. However, if we are to believe the bank’s press-releases and the statements made by Chairman of the Board of Directors and Chairman of the Managerial Board Vyacheslav Kim and Mikhail Lomtadze, the bank is doing well, moreover, this year, it is planning to list the shares of Kaspi.kz JSC (Kaspi Bank’s parent company) at the London Stock Exchange.

In our opinion, it is the intention to list the shares at the London Stock Exchange that explains Kayrat Satybaldy’s disappearance from the list of the co-owners of Kaspi Bank and its majority shareholder Kaspi.kz».

The thing is that, in the recent years, the foreign investors, the stock markets and the state structures that control and monitor the financial sectors of the developed countries have become much more sensitive and scrupulous. They have stopped turning a blind eye to the presence of officials and the people close to them among the co-owners of the companies that are planning to be listed at the stock exchange. Particularly, when it has to do with the autocrats and their relatives from the developing countries where corruption (including that at the very top of the power pyramid) has become the norm.

The presence of Kayrat Satybaldy, Nursultan Nazarbayev’s nephew among the big players could have put a crimp into Kaspi.kz’ London IPO or even rendered it impossible. By the looks of it, he and his business partners have solved this problem quite simply — the former has given (or sold) his shares to the latter, and the latter have either signed a secret agreement stipulating that, as the nominal owners of the asset, they will now watch over his interests and return the shares to their true owner upon his first demand or will respect his interests in a different way.

Moreover, Kayrat Satybaldy may become Kaspi.kz shareholder again in the course of the LSE IPO though the offshore firms he controls».

Judging by the fact that the Kazakh company has successfully managed to list the shares at the LSE at the top of the prize range and also at the time when the attitude of foreign investors to the issuers from developing states (particularly those allying with Russia) can hardly be called favourable, Kaspi.kz had its own LSE «fan base».

At this point, we cannot say who they were — the offshore structures or the nominal holders of Kayrat Satybaldy’s assets. Or perhaps the companies and the fund holders of Dariga Nazarbayev’s and Nurali Aliyev. We at KZ.expert believe that any scenario is feasible.

We do believe that anything is possible since the phenomenal Kaspi.kz’ LSE success may serve as a cover for moving the funds from the UK and other Western countries to Kazakhstan and vice versa. Apart from that, this success has allowed to legalise US1 $ bln to Kaspi.kz’ shareholders two of whom, Vyacheslav Kim and Mikhail Lomtadze, may be tied with Kayrat Satybaldy be certain agreements. For instance, to pay him for the assets they have previously obtained on the condition to become their formal owners and runners. 

Let us repeat, the possibilities are endless and, in order to understand what really happened, one is going to need time and make lots of efforts. Let us hope, not the futile ones.

In the meantime, let us congratulate Kaspi.kz and its owners on their success — a billion dollars in cash is no joke. It is what the overwhelming majority of the Kazakh ruling elite can be envious about.


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