Kazakhstan’s business-habits and life in general are, after all, much more diverse and interesting than even worldly-wise local and foreign investors think. To prove it, let us recall the story to which we have already devoted quite a few of our publications.
The latest one titled «The Third Part of the Babylon Ballet» was released on February 12, 2021. If you haven’t done so already, we strongly encourage you to read it. As for those who, due to one reason or another, do not have access to the text, we are going to present you some quotes to relate the gist of the case.
«To prove that this had really happened, we citied the case of MTS-Ertis LLP that, on October 15, 2014, signed a contract to carry out the polymetallic ore explorations at the Vavilonkoye ore field (East-Kazakhstan region).
The thing is that Metal Trade Company LLP that used to own 90% of MTS-Ertis’ shares had sold them twice, first, to Netherlands’ Babylon Holdings B.V. And then to SK Atrium LLP. It was done with silent agreement from the Ministry’s officials including Vice Minister Timor Toktabayev».
«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».
«On April 23, 2019, the Specialized Interdistrict Economic Court of the East-Kazakhstan region (located in Ust-Kamonogorsk) reviewed the claim filed by Babylon Holdings B.V. on rendering the sale-purchasing agreement between Metal Trade Company LLP and SK Atrium LLP on the sale of MTS-Ertis’ share unlawful and subject to denunciation. The court sustained the claim».
«Based on the information provided by our insiders, Head of MTS-Ertis LLP Ryskaliy Dzhakishev was going to sell the 90% participation interest of Metal Trade Company to a third party without settling the matters with the two previous buyers».
«Now, after a two-year pause, we are returning to examining this case that has become even more interesting if not downright shocking and astounding.
Let us start by saying that, according to our insiders, the project has now got a different potential investor. Allegedly, we are talking about Kazakh businessman Tleukabyl Abdulin, the Chairman of the Supervisory Board of Cooper Kz Ca that has interest in the oil business. Note (and this is much more indicative) that he is though to be a handyman of Kayrat Satybaldy, former Deputy Chief of the NSC and Nursultan Nazarbayev’s nephew.
Our sources quite allow for the possibility that it is Satybaldy (in 2018, ranked No. 7 in Forbes’ Kazakhstan’s most influential businessmen list and No. 36 in Forbes’ Kazakhstan’s richest businessmen list) who’s got interested in exploring the Vavilonkoye ore field.
Especially since, according to our insiders, the Ministry of Industry and Infrastructural Development has made a decision to prolongate the term of contract No. 4473 to carry out the polymetallic ore explorations thus confirming MTS-Ertis’ right of subsurface use. According to the sources, the role of the main lobbyist belonged to Vice Minister Ruslan Baymishev who has replaced Timur Toktabayev not only as deputy minister but as the shadow fixer of the project’s fate.
Note that he’d been directly linked to the project even before since he used to chair the Department of Subsurface Use. Now he seems to have become the main play along in the matter.
According to our insiders, Baymishev maintains official and unofficial contacts with the two key persons — Chairman of MTS-Ertis LLP A. Khatkin and Chairman of SK Atrium LLP Zh. Dzhakishev. Allegedly, both of them intend to obtain the right to sell 90% of MTS-Ertis’ ownership capital to SK Atrium from the Ministry of Industry and Infrastructural Development.
Our sources say that, in this matter, the parties are being vigorously assisted by certain Erzhan Kumarov, the chair of the Kazakh branch of the Norton Rose Fulbright global law firm. Obviously, he is doing this not without his own motives but for a solid reward (allegedly amounting to 300 mln tenge). They say that the money is to be transferred not to the branch’s account but to be paid to Kumarov personally.
And this is not all. The other side has also undergone some changes. Now, instead of Babylon Holdings B.V., the UK’s GTEEN Investments Limited that has entered the game (note that the latter owns 55% of the former).
The curious thing is that Erzhan Kumarov used to provide legal services to GTEEN Technologies Investments Limited and also represented Babylon Holdings B.V. in Kazakhstan. And it was he who, on February 17, 2020, without Babylon Holdings’ shareholders’ approval, sent letter No. 037/2020 to the competent state authority requesting opting out of participating in the Vavilonskoye project on behalf of the company.
Consequently to all these events, a new clinch has been formed — the Ministry of Industry is playing the side opposing the foreign investor. The thing us that, when GTEEN Technologies Investments Limited asked the state agency not to grant SK Atrium and MTS-Ertis the right to sell 90% of the company’s ownership capital, the agency stayed on passive defence. And continues to do so today.
According to our insiders, the reason lies in the fact that new Vice Minister Ruslan Baymishev, acting as the main point guard, has now got an opportunity to make some extra cash».
We apologise to the reader for these extended quotations, nonetheless, those who haven’t read our previous publications need them to learn about the case.
Now we would like to say a few words on what’s made us claim that Kazakhstan’s business-habits and life in general are much more diverse and interesting than even worldly-wise local and foreign investors believe.
The thing is that our insiders have showered us with new videos, audios and copies.
Unfortunately, we cannot publish all of these documents since we have no means to verify them. Apart from that, we believe it should be the responsibility of the related regulatory authorities. Still, we cannot keep silent about the documents, either.
For instance, ruling No. 00.19.6309-2/3445 of the Specialised Interdistrict Economic Court of the East Kazakhstan region (issued by Judge Ibrayeva N.E.) that had approved the settlement agreement of November 7, 2019, related to the civil claim of SK Atrium to Metal Trade Company LLP contains a number of shocking details (see below the full text of the document).
In particular, our attention was caught be Section 6.5 that said -
«SK Atrium LLP, Darbayev Erbol Amangeldinovich, Akhmetzhan Alisher Ryskaliyevich, Dzhakishev Zhumagali Toleukhanovich hereby agree that, after resolving the issue of alienating 10% share of the owners’ capital in MCT-Ertis LLP owned by SPK Ertis JSC, the parties are to take all the necessary measures to change the membership of MTS-Ertis by admitting the following members -
Akhmetzhan Alisher Ryskaliyevich and Dzhakishev Zhumagali Toleukhanovich — by giving 24,5% share of the owners’ capital to each,
Abdulin Tleukabyl Sartayevich — by giving him 51% share of the owners’ capital».
The thing is that SPK Ertis JSC is a quasi-governmental structure. And the issue of it giving away, selling or handing over 10% of MTS-Ertis to anyone had never been discussed in the public domain. However, according to our insiders, it happened. Allegedly, thanks to paying hidden «compensations» to those authorised to make the related decisions.
Let us remind you again that we have no proof that the said alienation of the public property did take place and that it happened by means of giving bribes. But we are certain that the case needs to be examined.
What is even more shocking is that Vice-Minister of Industry and Infrastructural Development Ruslan Baymishev who has replaced Timur Toktabayev not only as the deputy head of the Ministry but as the shadow fixer of the fate of the said business-project did not lobby the decision to prolongate the duration of Contract 4473 to explore complex ore deposits thus confirming MTS-Ertis’ right for the subsurface use just for the sake of it.
Apart from other documents, we have received two audio recordings in which the go-betweens, certain Anet Marsuly A. And Chingis D., mention the head of the subsurface use department (in other words, Mr. Baymishev) and receive the upfront fee in the amount of 10 $ thousand from the interested parties.
By the way, the fact that, soon after this, in February 2018, Ruslan Baymishev received Erzhan Kumarov’s lawyer in the Ministry building and then had been actively helping him is also indicative.
So, we are going to end this article in the same words as our previous publication –
«We are curios to see what comes next.
We are not to predict the story’s turns and twists as well as its finale for is would be the bathos of stupidity. However, it looks like the foreign investor’s plans and hopes will be outweighed by the Kazakh realia. This makes us presume that President Tokayev’s intention to conduct political reforms as well as the abundance of the governmental plans will encounter the problem called „it was very smooth on paper, wish we had a bloody grader“.
And we have no doubt that, in the absence of „the grader“, „the paper“ will take a severe drubbing».