The Far East Hot Cakes of the Nazarbayevs

Kazakhstan seems to be getting back its place on the Russian banking Olympus. Recently, we have learned that Pioneer Capital Invest LLP bought Asian-Pacific Bank (one of the biggest banks of Russia’s Far East and Siberia) for 14 bln rubles (more than 82 bln tenge).

Asian-Pacific Bank (APB) had emerged from the Amur regional branch of the USSR’s Promstroybank, however, in 2018 it lost the trust of the Central Bank of Russia that, first, demanded replacing the bank’s owners and, in the early hours of April 26, 2018, announced that the organisation was to be rehabilitated by the Banking Sector Consolidation Fund (FCBS).

The Central Bank of Russia chose not to revoke APB’s licence since it was systemically-important for the Russian Far East.  

On the eve of the sanation, the Tverskoy District Court of Moscow had arrested in absentia Andrey Vdovin, the bank’s majority shareholder and the co-owner of the Azbuka vkusa retail chain. He was accused of stealing 13 $ mln and a related criminal case was opened against him in accordance with Part 4 of Article 159 of the Russian Criminal Code (serious fraud). This is the standard practice of dealing with the «no-longer-trusted» banks and their owners in Kazakhstan as well as in Russia.

Immediately after acquiring the bank from its old owners, the Central Bank began searching for new ones. The first auction sale was scheduled for March 14, 2019.

Back then, it was two private and extremely torturous credit organisations that showed interest in buying it — Moskovskiy Kreditnyi Bank and Sovcombank. The former is associated with the powerful Rosneft and Igor Sechin «himself» standing behind it, the latter — with the Russian Direct Investment Fund that invited its partners (China Investment Corporation, the Japanese SBI Holdings and several Middle Eastern funds) to join the bank.  

Nonetheless, that auction sale failed. All these influential figures had suddenly lost their interest to purchase this systemically-important regional bank. Even the 9 bln roubles that the Central Bank had poured into its capital and the reduction of the price from 9.86 bln rubles to 6 bln rubles didn’t help the matters.

The setback did not discourage the Central Bank and it continued trying to sell the bank to different investors — both Russian and foreign. Alas, unsuccessfully. But then, Pioneer Capital Invest appeared on the horizon.

A role model for all investors

This time, the figure of the First President of the Republic of Kazakhstan was standing behind the buyer. For 67,45% of Pioneer Capital Invest’s shares belongs to the Nursultan Nazarbayev Foundation, a private organisation bearing the name of the President himself. Another 19,62% of the shares belongs to the Foundation for Social Development, a part of Nazarbayev University, and the remaining 12,93% belongs to the Development Foundation that is owned by another autonomous education organisation called Nazarbayev Intellectual Schools.

This was not the first Russian bank in Pioneer Capital Invest’s thrift-box. It already owns Russia’s Quant Mobile Bank. This oddly named organisation used to be called Plus Bank, an institute with a complicated history that we explored in our article of 2019.  

Not much has changed since then. The bank is still among the 100+ Russian lenders even though it did acquire the leading position in the auto loan sector.  

There seems to be no obvious connection between these banks and, so far, it is not even clear if these banks will merge in the future.

«The Golden Hot Cake»

If purchasing Plus Bank was largely involuntary and followed the buyout of Tsesnabank in Kazakhstan, then, in the case of APB, no traces of coercion were registered. Given the influential investors’ refusal to buy the bank, this makes the story even more interesting.

These refusals are likely to indicate the presence of some skeletons in APB’s corporate closets and the problems of its investors tightly connected to the gold business of the Amur region.

We are talking about the Petrozavodsk group founded by former member of the Russian Federation Council from the Amur region Pavel Maslovsky and his UK partner Peter Hambro (the title of the company represents the first names of the founders — Peter+Pavel). The company’s development was successful, it became one of Russia’s biggest gold mining firms with its shares successfully listed at the London Stock Exchange. 

However, at some point, it became the heart of the battle between different groups as a result of which the huge corporation had turned into a kind of «hot cake» tossed over from companies to companies and from persons to persons.

In 2018, a solid piece of this «golden» hot cake ended up in the hands of the notorious Kazakh investor Kenes Rakishev who called it the pearl of his asset portfolio and was seriously hoping that it would help him become a real ore mining and smelting magnate.  

However, despite these hopes, the asset ended up in another portfolio in less than a year. It was bought by the structures of Roman Trotsenko who, by the way, had begun his business career in Kazakhstan, as the commercial director of the Asia TV company.

As admitted by Trotsenko himself, he still has «a lot of friends» in Kazakhstan. We have learned what kind of friends they are after the OCCRP obtained the documents revealing the secrets of the inner working of the Meridian group, an offshore holding structure controlled by Kazakhstan’s former oil and gas minister Sauat Mynbayev.

Nurzhan Subkhanberdin’s Kazkommertsbank was directly associated with this offshore network. Subkhanberdin’s sold his bank to the aforementioned Kenes Rakishev.  

Within several months, in February 2020, Trotsenko sold his shares to the Russian group Uyzhuralzoloto controlled by Konstantin Strukov, the richest resident of Chelyabinsk and a vice-president of the local legislative assembly. He too is associated with Kazakhstan where he used to work during different periods from 1980 until 1997.

The miner Strukov had begun his career as a crew captain at the Karaganda Ugol’ industries and ended it as a mine captain at the Kazzoloto industrial group. This group’s path had not been easy and, for the past several decades, it had also been tossed over from one influential investor to another. The Kazakhaltyn ore mining and smelting concern was this enterprise’ successor. Kazakhaltyn is currently controlled by the so-called «Korean group» that, under the leadership of Vladimir Kim, is representing the Nazarbayev family interests.

When Strukov joined Petropavlovsk, the corporate drama of this firm turned into Pavel Maslovsky’s personal tragedy. Last December, he was accused of grand theft and arrested. He is now in jail.

It would be extremely naïve to believe that APB whose operating centre is located in the Amur region and in which Maslovsky has invested is not linked to the Petropavlovsk case.

Therefore, acquiring APB by the Nazarbayev structures may very well serve as an invitation to join the war for the «golden hot cakes» of the Russian Far East.

Chukotka Calling 

Apart from getting involved in the Amur gold mining business, the financial presence in the Russian Far East may help the Nazarbayev Foundation to maintain control over yet another gigantic enterprise. Kazakhmys represented by the KAZ Minerals public firm is getting ready to develop the Baim copper-gold mining project in Chukotka. It is one of the world’s biggest undeveloped fields of copper all of which is to be exported to China.

The ore extracted here is to be enriched and sent to China for smelting. 

As part of the development project, three opencast mines will be built and an MPP will be constructed. The whole infrastructure — a rotation camp for the miners, an airdrome and other auxiliary facilities — will be developed. The total amount of investments is to constitute US7 $ bln. 

For ice channeling, KAZ Minerals is hoping to acquire a nuclear-powered ice-breaker «Chukotka» that is to be completed in 2026. This project is to radically transform both the Chukotka peninsula and KAZ Minerals for which the Russian deposit will serve as the main resource base. And it was the relentless Kenes Rakishev who had made it possible.

Therefore, in terms of the resource structure, the Kazakh corporation will become a Far East company. From this perspective, acquiring the biggest Far East bank to control the matters seems quite logical.

Original publication on KZ.MEDIA


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