Who Holds the Permits Black Market?

It appears that the Vice Minister suspected of corruption was unable to keep his post after the reorganization of the agency. However, it was not due to the scandal surrounding the fraud involving the double “sale” of the same “product”. It was due to the change in the control of the Kazakh market of the natural resources’ exploration and production permits.

As we have underscored several times earlier, the foreign investors wishing to work legitimately without giving bribes to the Kazakh officials will find it difficult (sometimes, even impossible) to operate in the country.


Read of the subjectWhy Will Investors Not Come, “Feedbag” for a Vice Minister, In the Footsteps of the Great Combinator, On Those Able to Bustle About. 


With that, the main problem of Kazakhstan lies not in the individual officials wanting to receive a “bakhshish” but in the full-on readiness on the part of the officialdom to make money on anything they can make it on.

This is the result of the overlapping of many factors, starting from the historic ones when the barymta (stealing the livestock from an unfriendly (non-related) peoples) was widespread in the Kazakh steppes to the following of the example of the Leader of the Nation Nursultan Nazarbayev, his allies and relatives who have, quite successfully, converted the usurped state power in the fortunes constituting billions.

With that, the campaign against corruption, abuse of authority, embezzling the funds from the budget and the quasi-governmental structures that has been underway in the resent years is, in fact, nothing but sham because:

  • only those who have been caught red-handed by the law-enforcement agencies end up behind bares (or get off by paying a fee) which constitutes a non-significant share of the people breaking the law;
  • for the law-enforcers to operate effectively, they need: a) an order from the above, b) the pressure from the parties damaged by the conduct of the official; c) the lobbying of the issue by the competitors interested in the dismissal of the guilty party to be able to replace them with their own stooge or to simply do damage to the opponents.

Lately, the authorities have also started to react to the opinion of the press and the civil society, all the more so since the internet and social media have dramatically simplified the distribution of information. This, however, happens in the most extreme cases. Usually, when someone breaks the law and gets caught, the useful ties are found through the relatives and colleagues, after which the brakes are put on the matter and it is resolved to the mutual satisfaction of the parties involved.

On the surface, it is reflected in the fact that the relatives of the people killed in car accidents withdraw their claims against the guilty party, that the witnesses and the participants of the corruption-related crimes forget everything, that the bosses of the guilty officials shut their eyes to the violations they have committed and are satisfied with the guilty officials’ resignations on their own accord, that the investigators do not persist in their efforts, moreover, lose the evidence and their superiors do not insist on further investigation.

Let us confirm our idea by evoking the case we have already cited. We are talking about the Ministry of Industry and Infrastructural Development of the Republic of Kazakhstan and its former Deputy Minister Timur Toktabayev (as of this writing, he was no longer a member of the state agency staff and had the word “acting” added to his post description).

Here are some quotes from our article In the Footsteps of the Great Combinator. 

“Judging by the documents we have at our disposal, the problem of the investor (or, rather, the victim of this story) has to do with MTS-Ertis LLP that, on October 15, 2014, signed a contract on carrying out the polymetallic ore explorations at the Vavilonkoye ore field (East-Kazakhstan region).

Metal Trade Company LLP that owned 90% of MTS-Ertis’ shares sold them twice – first, to the Dutch investor Babylon Holdings B.V. and then to SK Atrium LLP.

It appears that the Ministry’s employees, being aware of what was going on, were trying to conceal that fact from the investor probably hoping that the truth would never see the light of day. Moreover, they quietly gave SK Atrium the official rights for the object of mineral resource management even though they had the same application from Babylon Holdings B.V.

According to the insiders, the reasons for such behavior on the part of the Ministry’s employees lie in a demand for a bribe. Apparently, a Vice-Minister (the sources name Timur Toktabayev) demanded US$250 thousand from each contender and made a decision in favor of SK Atrium that agreed to satisfy the demand”.

After the foreign investor, Babylon Holdings B.V., filed a claim to the court and the latter sustained it having cancelled the contract between Metal Trade Company LLP and SK Atrium LLP and the story with the illegal activities of certain officials from the then Ministry for Investments and Development became available to the public, Daniyal Akhmetov, the Governor of the East-Kazakhstan region, was the first one to respond to the situation.

The thing is that Ertis, a social and enterprise corporation (SEC) that was founded, among others, by the Governor’s Office of the East Kazakhstan region, is the co-owner of MTS-Ertis LLP. In other words, the brewing scandal had affected the regional Governor’s Office and the Governor himself who used it to fire former Chairman of the Board of Directors Anton Kramarenko and replace him with Eldar Tumashinov.

It turns out that, already at the start of January 2019, Babylon Holdings B.V. informed Mr. Kramarenko that it had bought a participation interest in MTS-Ertis LLP from Metal Trade Company. Therefore, the subsequent sale of the participation interest in the latter would have been illegal. However, the then Chairman of the Board of Directors of SEC Ertis did not react to this information and the transaction was completed. All this happened because Kramarenko was highly dependent on the top-management of the Ministry for Investments and Development that was in charge of giving out the permits for the natural resources’ exploration and production.

According to the insiders, the decision to fire Kramarenko and to appoint Tumashinov was made by Governor Daniyal Akhmetov personally. With that, it looks like he simply used the situation to put his henchman in charge of the corporation. Note that former Vice Minister of Investments and Development Timur Toktabayev was acting in league with Chingiz Dosmukhambetov, the son of Nursultan Nazarbayev’s close ally Temirkhan Dosmukhambetov, the former Governor of Astana and the Head of the Presidential Affairs Department. With that, Toktabayev and Chingiz Dosmukhambetov jointly owned company KAMP-VOSTOK LLP in which Toktabayev had “invested”, apart from his own funds, 11 permits for the natural resources’ exploration and production.

In view of all this, we assumed that Toktabayev would be able to keep his post even after the reorganization of the agency. But his luck was out. After the Ministry for Investments and Development was transformed into the Ministry of Industry and Infrastructural Development and Zhenis Kasymbek was replaced with Roman Sklyar as the head of the agency, Toktabayev lost his post.

However, according to the insiders, one of the main reasons for that was not so much the scandal surrounding the fraud involving the double sale of the participation interest in MTS-Ertis LLP as the change in the control over the Kazakh “black” market of the natural resources’ exploration and production permits.

They say that, previously, rewards were demanded in exchange for all the permits (minus, of course, those given to the foreign and Kazakh investors based on the agreements sanctioned by Akora). Among the end handlers of this shadowy sector of the national economy, the insiders list - 

  • Timur Kulibayev, son-in-law of the First President of the Republic of Kazakhstan – in the oil & gas industry;
  • Temirkhan Dosmukhambetov – in the other branches of industry.

Thus, the scandal with the sale of MTS-Ertis’ participation interest was not the reason for the Deputy Minister’s resignation. The two simply overlapped. At the most, it was used as a pretext. Therefore, it is very likely that Toktabayev will eventually return to the state service and the investigation of the case will, in time, “die” calmly and quietly.  


P.S. INTERESTINGLY, as of this writing, the state agency’s website listed only three vice ministers. Toktabayev was not named among them. However, today, there are four. The fourth one is our protagonist. It appears that, after the publication of this article, someone was quick enough to put their best foot forward.


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