New Names in the BCC Scandal

In the article How CenterCredit Conned a Borrower we seemed to have touched upon a sensitive subject. A large number of comments on our website show that. The subject is the «friction» between Bank CenterCredit (or, to be more precise, its key shareholder Bakhytbek Bayseitov plus the top-management) and the bank’s individual borrowers (not the biggest ones at that).

Based on the case examined in the article, we have already concluded that BCC’s actual financial standing may turn out to be much worse than the bank’s official financial statements would have you believe.

We have also suggested that the brewing scandal may turn out to be critical not only for the borrowers but also for the lender. If only because the situation on the market remains complicated and unpredictable. (One is safe to assume that, in the foreseeable future, the number of the banking sector participants will shrink by at least two times — from 28 to say 14 banks).

With that, no details including the names of the company-borrower and the people who have become, according to their word, the victim of the fraudulent (therefore criminal) actions on the part of Bakhytbek Bayseitov, Galym Kusainov and the other BCC top-managers have been disclosed in the article.

However, our cautiousness was irrelevant since, in the readers’ comments written on our website (written, by the looks of it, by two groups of commentators), the story is presented in-depth, with the naming of all the interested parties, the disclosure of their motives and the exhaustively detailed narration of the event history.

Thus, we can conclude that a rather ordinary (for Kazakhstan) conflict between a bank-lender and a borrower has unexpectedly grown into a sharp confrontation not only between the actual participants of the case but those standing behind them and is developing into a high-profile scandal right before our eyes.

So far, the scandal has not yet reached the same high-profile level as say the conflict between the Republic of Kazakhstan and Moldovan investors Anatolie and Gabriel Statis but, potentially, it has the capabilities to do just that. If only because its participants may start disclosing big volumes of the information that is usually kept secret not only from the press, civil society and market experts but from relatives and business-partners.

The information received from our insiders testifies to that. According to them, the bank has already had several business meetings with the participation of the Board members and their affiliated persons where they have been discussing what to do next. And, by the looks of it, the bank and its key shareholder Bakhytbek Bayseitov have chosen a solution by force.

In other words, they may try:

  • to open a criminal case against one of the Kulbayev brothers — Bekzhan;
  • to forcibly bankrupt, under the court decision, Flamma LLP, the owner of Dutch company Saigak Kazakhstan B.V., the operator of the Temir oil field (Aktobe region);
  • to exert the power pressure on the opponents including a possible employment of criminal groups;
  • to bribe the police investigator responsible for making a decision upon examining the claim of the injured parties.

As for the representatives of the opposing side, they will probably try to prove that Bakhytbek Bayseitov is closely associated with a major criminal organization and the bank engages itself in raiding on a regular basis. Apart from that, they are likely to try and destroy certain business-plans of the bank’s shareholders, among other things, in the resource sector.

Since it is extremely difficult to puzzle out this complex story that involves a number of people and interests (including the external vis-à-vis the actors), we are not to take it upon ourselves to judge who is right and who is wrong. However, this case can assist us in carrying out our main task of working out an expert assessment of the events and the processes happening in Kazakhstan. Therefore, we will continue following this case closely.

There is all the more reason for this as, besides Bakhytbek Bayseitov and Galim Khusainov (the former being the key shareholder and the latter being the Chairman of BCC), there are now new characters that have entered the stage, for example, Anuar Ushbayev, Erbol Tokkozhin and others. There have also appeared the structures well known on the market — investment holding Tengri Partners LLP and its affiliated company Tengri Capital.

Now, let us confirm our earlier prediction (quote).

 «By getting to the bottom of the bank’s state of affairs and using the scandal around the 6 $ mln dollar transit loan handed over to the company affiliated with Bakhytbek Bayseitov, the National Bank may get the opportunity to exert an enormous pressure on BCC’ shareholders. Moreover, the NBK may do the same to BCC what the latter is now doing to its unfortunate borrower. In other words, to turn the situation upside down and simply take away the asset now that the reasons and the foundations for that are already there».

We will also remark that, thanks to the case at hand, we now have a unique opportunity to evaluate the corporate practices in Kazakhstan. Not the ones recorded in the official documents but the ones that are actually being used. For the refusal of BCC management to make any attempt to find the common grounds with the opponents and work out an effective solution of the situation while choosing to put pressure on them instead (quite possibly through the use of illegal means) results not only from their fear of losing the battle in the legal field but from the mentality that has been formed both nationwide and within the ruling elite.

This mentality is based on the principle that the one who has more rights is in the right. Therefore, if someone is to give in in a conflict situation (even if they must, according to the law), this someone will be perceived as a weakling who is allowed to be robbed and harmed.

This results in the fact that, in Kazakhstan, in any kind of complex, multi-leveled and multi-channeled schemes that involve, voluntarily or not, dozens of people (including entrepreneurs, shareholders and banks’ top-managers, employees of the law-enforcement agencies, high-rank officials and the people with big fortunes and influence in the state apparatus), everything is usually resolved according to the unwritten rules and through conflict.

Unfortunately, the said scheme is typical for modern Kazakhstan and, in our opinion, will continue to exist in the country for years to come. If only because the process of the initial accumulation of capital in the republic is nowhere near its end. And as for the nation-wide law-obedience and developed civil consciousness, most Kazakhs must still travel too long a way to obtain it.


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