Anti-Corruption of Kostanay Region, which earlier in a telephone conversation confirmed to journalists of FBRK the presence of signs of corruption offences in the appointment of LLP «Agrogenetics» as the operator of breeding livestock, has redirected a repeated request about the progress of the investigation to local executive bodies.
In June of this year, we wrote about how peasant farms of Pavlodar Region suffered due to the state programme «Sybaga». Farmers took out loans from JSC «Agrarian Credit Corporation» in order to acquire breeding livestock from Germany under the programme. The operator was LLP «Agrogenetics» from Kostanay.
In 2020, the peasant farm, through LLP «Credit Partnership «Bayanaul», received a loan of 85 million tenge from JSC «Agrarian Credit Corporation». It was envisaged that the LLP, under an agency agreement, would purchase 100 head of cattle in Germany from the supplier company Lucas Kossen Livestock GmbH, after which the livestock would be delivered to Kazakhstan directly to the «Ata – Konys» farm.
Under the terms of the agreement, the funds for the purchase of the cows were transferred to the operator immediately and in full. However, the peasant farm never received its livestock, and the deal turned into legal proceedings between the participants. The credit partnership from which the peasant farm had taken the loan also took it to court.
During the court proceedings, it emerged that Lucas Kossen Livestock GmbH had received the money from LLP «Agrogenetics» for the livestock for the peasant farm «Ata – Konys», but refused to supply the goods, citing the fact that LLP «Agrogenetics» had a debt to them from previous deliveries of breeding cattle to Kazakhstan.
Undoubtedly, the supplier failed to fulfil its contractual obligations. The operator, for its part, stated that it did not see any fault of its own in the non-delivery of the goods. An oversight was also the fact that the peasant farm did not issue the necessary power of attorney to the LLP, which, according to the law, allows for actions stipulated by the agency agreement to be carried out.
The court nevertheless decided to uphold the claim of the peasant farm «Ata – Konys» and to recover 85 million tenge in debt from LLP «Agrogenetics» in favour of the farm. However, as of today, the LLP has been declared bankrupt, and the company has no means to pay. In the end, the Pavlodar farmers were left not only without money and livestock, but also in debt.
Other farmers also suffered from the activities of LLP «Agrogenetics». For example, the farm «Astyk» similarly decided to purchase breeding livestock, received a loan for 42 million tenge, but, after transferring the money to the operator, was left with nothing. The court ordered the LLP to return the money to the farm, but this yielded no results.
Last year, there were 11 peasant farms in Pavlodar Region in a similar situation. It was reported that appeals had previously been sent to the Ministry of Foreign Affairs of the Republic of Kazakhstan. In 2021, the First Economic Arbitration Court ordered the German supplier to pay the full debt to the farmers. But nothing has changed since then.
The editorial board of FBRK, for its part, managed to find out that LLP «Agrogenetics» was registered in the same year that lending for the acquisition of breeding stock was introduced into the «Sybaga» programme. And the owner of LLP «Agrogenetics» – Ainura Gumerova, is the sister of Kairat Ismailov, who at that time held the position of deputy head of the agricultural department of Kostanay Region and headed the subsidy department.
At the beginning of July, the Anti-Corruption of Kostanay Region confirmed that this fact constitutes a corruption offence. The founder of FBRK Kirill Pavlov also met with the Chairman of the Anti-Corruption Agency of the Republic of Kazakhstan, Ashat Zhumagali, on this matter.
State bodies, for their part, in response to our request, explained what the Pavlodar farmers who had fallen into debt bondage should do. Thus, the Ministry of Agriculture reported that since this issue has already been considered in court – the court ruled to recover the debt from the LLP in favour of the peasant farm – the ministry is not entitled to intervene in the resolution of this matter.
The Agrarian Credit Corporation similarly referred to the court decision, stating that the peasant farm needs to carry out measures to recover the debt from LLP «Agrogenetics» within the legal framework. The ACC also noted that regarding the issue of the debt, the peasant farm can apply directly to the Credit Partnership itself, however, they are ready to consider the possibility of providing a deferment/instalment plan for the loan, provided that additional liquid collateral property is offered, sufficient to cover the obligations of the credit partnership under the farm's loan.
The Department of Agriculture of Pavlodar Region responded that starting from October 2022, changes were made to the financing conditions for the peasant farm's loan regarding the frequency of repayment of remuneration, from quarterly payments to a once-a-year payment. Furthermore, it was previously proposed to secure the loan by linking and reassessing collateral on all existing loans, which would reduce the volume of necessary additional collateral from 72.6% to 25%. It is noted that the peasant farm refused these conditions due to not having the relevant property and funds, stating that the livestock was not provided, and therefore the state should write off this loan.
Also, according to the Department of Agriculture of Pavlodar Region, the department has sent requests on the issue of making a procedural decision regarding LLP «Agrogenetics» to the Police Department of Kostanay Region and on the execution of the court decision – to the Department of Justice of Kostanay Region. The materials are registered in the Book of Accounting for Incidents of the Police Department of Bayanaul District, Pavlodar Region, and the documents are being processed by a private bailiff.
The other day, the editorial board of FBRK decided to inquire again about what stage the investigation into the corruption offence is at. However, the Anti-Corruption of Kostanay Region, without providing an answer itself, for unknown reasons redirected our request to JSC «NMH «Baiterek» and JSC «NWF «Samruk-Kazyna», which had previously given us brush-offs about their non-involvement in this situation. Furthermore, the regional Anti-Corruption forwarded the request to the Department of Agriculture and the Akimat of Kostanay Region.
Why the regional body responsible for corruption offences is redirecting a direct question to other state bodies remains a mystery to us for now. The editorial board of FBRK nevertheless intends to find out details about what stage this corruption case is at and whether it is being pursued at all.