Bank CenterCredit: Tempers Are Running High

It looks like the conflict between Chairman of the Bank CenterCredit Bakhytbek Bayseitov and Dauren Zhaksybek, son of the Head of Nazarbayev Administration, assumed the open form. Who will win the battle?

At the beginning of March, JSC Bank CenterCredit has informed the Kazakhstan Stock Exchange (KASE) about terminating the authorities of two board members as of 27th of February, namely Dauren Zhaksybek and Erzhan Toleubekov. The fact was recorded in the act of the Board of Directors of February 28, 2018.

Earlier, we had already written on the conflict between Bakhytbek Bayseitov (23.89% of the ordinary shares or 36.26% of all the Bank CenterCredit shares as of January 1, 2018) and Dauren Zhaksybek via JSC Tsesnabank (29.56% of the ordinary shares or 27.96 % of all shares) and JSC Financial Holding Tsesna (68.96% of the preference shares or 13.42% of all shares) that controls 29.56% of the bank’s voting shares (read our inside On Bakhytbek Bayseitov’s Big Problems).

Judging by the Bank CenterCredit Board’s decision of February 28, 2018, the conflict has assumed the open form. The matter is that, usually, electing someone as a board member as well as releasing someone from this duty happens at the shareholders meeting. Using such a non-traditional mechanism testifies to the heat of the passions.

Obviously, the intra-corporate conflict between Bakhytbek Bayseitov and Dauren Zhaksybek will not stop there. Logically, the latter will challenge the Bank CenterCredit Board’s decision as unlawful and the court is likely to take his side. Of course, Mr. Zhaksybek’s exit may be a result of the compromise with Bayseitov. But then, the merger of JCS Bank CenterCredit with JSC Tsesnabank will certainly not take place.

If, somehow, it will turn out that Bakhytbek Bayseitov was simply trying to push out the investor, everything will be possible. Including opening a criminal case against the management and the Bank CenterCredit majority shareholder with his later exile and handing the financial institute over to a different shareholder appointed by the rescuer. In other words, the story of Bank RBK will repeat itself.

Bakhytbek Bayseitov’s Achilles’ foot is the bank itself whose real financial situation is much worse than they declare. Of course, the financial support on the part of the National Bank of Kazakhstan that included Bank CenterCredit into its Kazakhstan banking sector support and rehabilitation program had played its positive role, but this alone is clearly not enough.

Under these conditions, a lot depends on the position the National Bank will take as the regulator. If Daniyar Akishev, for some reasons (for instance, not to exacerbate the situation in the financial sector) supports Bakhytbek Bayseitov, the latter will perhaps remain standing. If not, his chances to win the battle with son of the Head of Nazarbayev Administration Adilbek Dzhaksybekov are very slim.


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