We are continuing following up and commenting on the conflict between entrepreneur Bekzhan Kulbayev and a «group of fellows» led by Bank CenterCredit’s co-owner and Chairman of Board of Directors Bakhytbek Bayseitov.
One should note that the materials devoted to this business-conflict turned out to be perhaps the most rating-boosting ones judging by the number of viewings and the general reaction to them (in the Russian version). For instance, 55 comments were left under article BCC Is «Drawing» in Kompromat.
However, the publication titled Prosecutors Interfere in the BCC Scandal was the record-setting one (83 comments). The second place belongs to How CenterCredit Conned a Borrower (70 comments). The article titled Bayseitov vs. Kulbayev: A War on All Fronts is also among the top five (54 comments).
Thanks to all these comments (left by the interested and at the same time quite informed parties), it is not just the Kazakh but the foreign audience as well that have received a unique, in our opinion, opportunity to peek inside the Kazakh business-environment. And to understand why only the strongest business-groups (clans) «survive» in the country and how they «consume» others, and quite scot-free at that. And to confirm once again: for foreign investors, except perhaps those from Russia and China, there is absolutely nothing to do in Kazakhstan.
As for the conflict between entrepreneur Bekzhan Kulbayev and a «group of fellows» led by Bank CenterCredit’s co-owner and Chairman of Board of Directors Bakhytbek Bayseitov, so far, it has been developing to the disadvantage of the latter. Last month, they lost in courts twice — in the Netherlands and in Kazakhstan where they tried to challenge Kulbayev’s ownership of companies Saygak Kazakhstan B.V. and Flamma LLP.
This fact may turn out to be rather critical for both Bank CenterCredit JSC and Mr. Bayseitov personally. The reasons are threefold.
First, having received the access to the basic source documents and monetary accounts of Flamma LLP, Kulbayev has an opportunity to not simply intensify the pressure on his opponents but qualitatively change it.
The thing is that, according to our insiders, when Flamma LLP first asked Bank CenterCredit for the loan, it requested only the necessary sum of US5.5 $ mln. However, the intermediaries represented by TP Energy and Bakhytbek Bayseitov himself, decided to use this opportunity in order to solve their own financial problems. As a result, the following was added to the sum asked for by the borrower:
- US0.5 $ mln that, later was handed over to son of Kazakhstan’s ex-Prosecutor General Rakhat Darmesh by TP Energy and its managers,
- $6 mln that, later, was handed over to Mangistau Oil Resources controlled by Bakhytbek Bayseitov.
However, no written objectivation for increasing the size of the loan by more than twice its original sum was presented. No one had simply thought of that — everyone was in a rush. And now it is too late to do so.
On the other hand, there is something else that is much more crucial here — we are talking about the quality of the collateral.
The thing is — the creditor estimated that the borrower’s assets (in this case, Flamma LLP) are worth US24 $ mln. And was not wrong since the real value of the oil processing mini-plant (where the extracted substance is separated into oil, associated petroleum gas and oilfield water and then oil is adjusted to its commercial quality) is much higher — about US38 $ mln.
With that, however, the oil treatment plant could not have been accepted as a collateral since it was brought to Kazakhstan temporarily, without the payment of the custom duties and VAT, as part of the production-sharing agreement. Therefore, it can only be exported or given away as metal scrap.
In other words, the management of Bank CenterCredit JSC cheated having made a decision to accept the oil treatment plant as Flamma’s loan collateral. And they did it for the sake of one thing only — to arrange for 6.5 $ mln transited through their borrower to come to their possession.
Obviously, this transaction does not paint Flamma LLP and its management in a positive light, however, the main responsibility rests on the shoulders of Bakhytbek Bayseitovand and his associates. We believe that Kulbayev will definitely use this fact especially since the criminal case against Bayseitov has recently been handed over to the Department of Economic Investigations of the Financial Monitoring Committee at the Ministry of Finance of the Republic of Kazakhstan.
Second, Bekzhan Kulbayve has received an opportunity to not simply challenge the actions of Bank CenterCredit JSC related to enforces recovery of the funds from Flamma LLP and Saygak Kazakhstan B.V. (credit support provider) that the bank has already written off to its benefit. (Note that the money has been written off not only by Bank CenterCredit but by Eurasian Bank JSC as well. And, according to our sources, we are talking about rather large sums of money).
Now, the borrower has also gained an opportunity to claim that the banks had abused their authority which may result in rather scandalous trials and not only in Kazakhstan but, say, in Netherlands as well.
Third, by exerting pressure on Bekzhan Kulbayev, Bank CenterCredit JSC has written off US344 $ thousand from Saygak Kazakhstan B.V.’s operating account in ATF Bank. However, it was done illegally since these funds belonged to the so-called liquidation fund.
In other words, one cannot operate these funds without the approval of the authorized body, the Ministry of Energy of the Republic of Kazakhstan, since they are intended for the utilizing of the waste and the rehabilitating of the oilfield. And Bank CenterCredit JSC — whether unknowingly or willfully — had blatantly violated the ecological law of the Republic of Kazakhstan.
Amid all this, even the forgery of the bank documents which, according to our insiders, has become the norm for Bank CenterCredit JSC (and to which we will probably devote our next article) does not seem such an outrageous violation of the Kazakh legislature.
Thus, the conflict between entrepreneur Bekzhan Kulbayev and a «group of buddies» from Bank CenterCredit JSC continues. And it is unlikely to be resolved in the next couple of years since the head of BCC is a rather influential person in Kazakhstan with friendly ties with Chairman of the National Bank Erbolat Dosayev.
In view of this, it will be very interesting to see whether the regulator will react to our numerous publications on the subject or will prefer to limit itself to yet another summoning of BCC’s top-managers for un unrecorded pillow talk?
For, by the looks of it, this financial institute is not only engaged in raiding (which, of course, is beyond the regulator’s sphere of responsibility) but has falsified a credit dossier and, thorough an intermediary firm, has provided the company controlled by the co-owner and top-manager of the bank with 6 $ mln.
It is possible that this case will also serve as a test for the National Bank of the Republic of Kazakhstan and Dosayev himself; a test not so much for honesty and integrity as for the simple adequateness in terms of being able to perform the tasks and functions they are responsible for.