Former owners of enterprises that were suspended and sold off through JSC "Investment Fund of Kazakhstan" (IFK) during the period when the Investment Fund was transitioning from state ownership to private and back again, have sent a letter to the President requesting the return of investment assets.
Let us recall the history of the Investment Fund's activities. It was created in 2003 with the aim of recovering previously invested capital and assisting in the launch of idle production facilities. Later, IFK became a professional management company for restructuring and managing distressed assets.
In 2011, IFK was transferred to the trust management of the then Ministry of Industry and New Technologies of the Republic of Kazakhstan. In 2013, the entire shareholding of JSC "Investment Fund of Kazakhstan" was transferred to JSC "National Management Holding "Baiterek".
Then, in 2021, 100% of the Investment Fund's shares, valued at 63.3 billion tenge, were sold to private individuals for 10.6 billion tenge. The asset was sold as part of the Comprehensive Privatisation Plan for 2021-2025. The new owners of IFK became some of Kazakhstan's wealthiest and most influential businessmen, the brothers Sukhrab and Farrukh Makhmudov.
In October 2023, the Agency for Financial Monitoring (AFM) announced it was conducting an investigation into the illegal privatisation of the "Investment Fund of Kazakhstan" and the return of the Investment Fund to state ownership, specifically back under the control of NMH "Baiterek".
It was reported that at the start of the pre-trial investigation, IFK, which traded in distressed assets from the "Development Bank of Kazakhstan" (DBK), had a debt to the bank amounting to 18.7 billion tenge. The AFM managed to reduce the amount of debt threefold – to 6.3 billion tenge.
During the investigation, control over 12 subsidiary companies of the "Investment Fund of Kazakhstan" was also restored, some assets were returned to the Fund's balance sheet, and the agreement transferring IFK into long-term trust management of JSC "Dosjan Temir Joly", affiliated with the Makhmudovs, was annulled.
Nevertheless, the change of ownership led to the bankruptcy of enterprises controlled by the "Investment Fund of Kazakhstan" and resulted in critical interest rate levels at second-tier banks (20-56%). This is stated in a letter to the President by the former owners of the affected production facilities.
"Another scam involving our factories, like the new murder charge and the previously handed-down sentences in numerous criminal cases involving the heads of NMH 'Baiterek', IFK, and DBK, is direct proof that all NMH 'Baiterek' decisions concerning us were initially shaped under the influence of individuals already intent on committing particularly audacious grave crimes", the letter states.
In the document, a copy of which is held by the editorial board of FBK, the ex-owners ask the head of state "to support their right to the return of unjustly expropriated assets". The letter claims that certain interested parties "replaced everything of value with budget flows under their control, creating and losing venture funds".
Furthermore, it is noted that these same individuals brought false accusations against the owners of the enterprises with the aim of underfunding the factories. It reports the existence of a series of instances of illegal decisions and tenders, the details of which we intend to investigate.
The authors of the letter assure that they can resume the operations of the bankrupted production facilities, but fear the repeat sale of the returned assets. Consequently, the ex-owners of the organisations ask for the creation of a "special anti-crisis commission", in which they are prepared to participate.
Possessing the necessary skills, experience working with foreign partners, and applying methods of international practice, the former owners of the enterprises hope to revive the deliberately halted and sold factories and are counting on the support of the President in this challenging matter.
The editorial board of FBK is meanwhile beginning a detailed analysis of the lawlessness that has arisen as a result of long-standing corrupt connections, which led the enterprises to bankruptcy.
To be continued…