The construction market of Karaganda is at a pivotal moment: the confrontation between residents and developers exposes the systemic problems of the industry. Numerous legal disputes, violations of town planning norms and work without the necessary documentation are just some of the violations committed by the city's construction companies. Let's look at what is known about the activities of the most problematic developers.
CONSTRUCTION BUSINESS OPERATING OUTSIDE THE LAW
Karaganda, like many cities in Kazakhstan, is experiencing a construction boom. However, not all companies operate within the legal framework. Among these market players are RGB Group LLP and the liquidated, but still effectively operating, Zhyloi Fond LLP.
The main problems in the construction sector in Karaganda include infill development, often without the necessary documentation, violation of town planning norms, and illegal attraction of funds from equity holders. Until recently, control by state bodies was insufficiently effective.
RGB GROUP LLP: BUILD FIRST, GET THE PAPERWORK LATER
As we wrote earlier, residents of the Orbita-1 microdistrict are actively protesting against the plans of RGB Group LLP to build a 15-storey residential building in the narrow space between an existing building and the road. Local activists are concerned about the potential shading of their apartments, increased strain on utilities, and problems with parking spaces. This case is just one example of the conflicts arising around the company's activities.
Registered in June 2015, RGB Group LLP has a high tax risk rating. During its period of activity, the company has paid 231.4 million tenge in taxes. Since March 2021, the founder has been Nursultan Ospanov, and the head has been Duman Balabiev.
Notably, Duman Balabiev has also been the head of Renaissance KRG LLP, which deals in the purchase and sale of multi-apartment and residential buildings, since November 2022.
The company's organisational structure includes other key employees. For instance, Diana Magrubzhanova is listed as a contact person for the organisation, who, according to some sources, works as an accountant. Interestingly, the same person is the founder of the aforementioned "Renaissance KRG", showing an overlap of interests between the companies.
Also, "RGB Group" has a subsidiary organisation — RGB Service LLP, which manages real estate for a fee or on a contractual basis. The head and co-founder of this company is Akylbek Dosmagambetov.
The legal history of RGB Group LLP reveals systemic violations of construction legislation:
- In November 2021, the company received a fine of 51,048 tenge for starting construction of the Family Park Residential Complex without notifying the architectural and construction control authorities;
- In July 2022, a fine of 612,600 tenge for building the Central Park Residential Complex without approved project documentation;
- In May 2023, a fine of 1,035,000 tenge for illegal attraction of funds from equity holders during the construction of the Central Park Residential Complex;
- In December 2023, fines amounting to 86,250 tenge and 483,000 tenge for building the Central Avenue Residential Complex without notification and without approved project documentation.
Significantly, in the case of the fine for illegally attracting funds from equity holders, the company requested an instalment plan for the penalty, citing difficult financial circumstances, despite the active construction of several residential complexes simultaneously.
The company was also involved in a legal dispute with Aiza LLP over a land plot at 49/2 Mukhanov Street. Although the court ultimately recognised "RGB Group's" rights to the disputed territory, the very fact of the legal proceedings demonstrates the ambiguity of the land plot situation in the city.
ZHILOI FOND LLP: ACTIVITY AFTER LIQUIDATION
An even more unusual situation is observed with Zhyloi Fond LLP. The company, registered in September 2017, was officially liquidated in November 2023. However, despite this, it continues to actively advertise and sell apartments in various residential complexes in Karaganda, such as the "Orda", "Alash", and "Verona" residential complexes, amongst others.
It is known that "Zhyloi Fond" does not have permission for shared-equity construction and attracts funds from equity holders through housing construction cooperatives (HCCs). This operational scheme could potentially create certain questions regarding the protection of buyers' rights in the event of disputes.
The company's last official management: founder — Daniyar Kemelev, head — Yelzhan Zhumakhanov. Both individuals are associated with numerous companies in the construction and real estate sectors.
According to open sources, Daniyar Kemelev is the head of a number of companies, including Dom Karbysheva LLP (construction of residential buildings), KESh LLP (wholesale trade), DOSTAR KRG LLP (real estate operations), PROF STROY LTD LLP (wholesale trade), and the liquidated Stroikomplyus LLP.
Yelzhan Zhumakhanov is also listed as the head of several companies: SPEKTR 2030 LLP (residential real estate operations), Firma "Kyrman" LLP (real estate rental and management), and SK "Zhenis" LLP (purchase and sale of residential houses). This overlap of interests across various companies may indicate the creation of a branched corporate structure in construction and related fields.
The legal history of "Zhyloi Fond" is of particular interest. In March 2021, the company faced a lawsuit from Sole Proprietor Melordoyeva V.F., who demanded the demolition of some installed structure. However, the case never went to a full hearing — the statement of claim was left unexamined at the initiative of the claimant himself, and proceedings were terminated at the preliminary hearing stage. The details of the structure subject to demolition were not specified in the court documents.
A more telling case occurred in August 2022, when "Zhyloi Fond" itself acted as a plaintiff against Sole Proprietor "Tastemir" regarding unfinished construction and finishing works. According to the case materials, in January 2022, a service agreement worth 4,985,000 tenge was concluded between the companies. "Zhyloi Fond" transferred 70% of the amount (over 3.4 million tenge) to the contractor, expecting the work to be completed by April 2022. However, the contractor did not meet the deadlines, and an assessment showed that the work actually completed was only worth 1,994,000 tenge.
The court ruled in favour of "Zhyloi Fond", recovering 1.5 million tenge of debt from the contractor, 200,000 tenge in penalties (although the plaintiff had demanded 2 million), as well as court costs and costs for an independent assessment. An attempt by Sole Proprietor "Tastemir" to appeal the decision in April 2023 was unsuccessful — the appeal was returned due to improper filing. In total, 2,246,365 tenge was recovered from the contractor.
In February 2024, KaragandyZhyluSbyt LLP filed a lawsuit against Zhyloi Fond LLP to recover a debt. However, by this time, the defendant had already been liquidated (13 November 2023), which led to the termination of proceedings. The claim for debt recovery remained unsatisfied due to the absence of a legal entity from which funds could be recovered. The exact amount of the debt and the basis for its occurrence were not specified in the court documents.
LAND PLOTS: HIDDEN CONNECTIONS
According to the information system of the "Unified State Real Estate Cadastre" (USREC), the land plots on which the construction of "Zhyloi Fond's" residential complexes was or is being carried out are formally under the control of other legal entities. This is unsurprising, given that the company is officially liquidated. However, the construction and sale of apartments in its projects continue.
The title holder of the 0.9-hectare land plot for the "Verona" Residential Complex is Verona Stroy LLP. The owner of the company is Adam Khatuev. The title holder of the land plots on Michurin Street, intended for the construction of 5-storey residential buildings and the Park Residence Residential Complex, is listed as the Park residence KRG HCC. The cooperative has 10 founders, and the head is again Adam Khatuev.
The companies that are now the title holders of these land plots are most likely controlled by Zhyloi Fond LLP or are closely cooperating with it. This is indicated not only by the overlap in management but also by the fact that on the official website of Zhyloi Fond LLP, apartments in the residential complexes being built on these plots continue to be advertised and sold.
Such a scheme may indicate an attempt to diversify risks by creating a network of related legal entities. Particularly telling is the fact that "Verona Stroy" was registered in July 2023, a few months before the liquidation of "Zhyloi Fond", which may indicate advance planning for the transfer of assets.
CONCLUSION: SYSTEMIC PROBLEMS AND THE NEED FOR CHANGE
The situation with unscrupulous developers in Karaganda reflects the deeper systemic problems of the entire construction industry in Kazakhstan. The examined examples of the activities of "RGB Group" and "Zhyloi Fond" demonstrate a whole range of issues requiring attention from both state bodies and the public.
Firstly, the insufficient effectiveness of the existing control and supervision system is obvious. Developers repeatedly start construction without the necessary documentation, attract funds from equity holders in violation of the law, and often remain unpunished or get off with insignificant fines, incomparable to the scale of the violations. In the case of "RGB Group", fines averaged from 51 to 612 thousand tenge, which for a large construction company is more akin to operating costs than a serious penalty.
Secondly, the situation where a legally liquidated company (Zhyloi Fond LLP) continues to function de facto through a network of related legal entities raises questions. This creates legal uncertainty for property buyers, who may not fully understand with whom they are signing contracts and who is responsible for their execution.
Thirdly, a serious problem is the lack of transparency in the process of attracting citizens' funds through housing construction cooperatives, which can be used to circumvent the requirements of shared-equity construction legislation. In the absence of proper control, such schemes potentially expose buyers to additional risks.
Fourthly, infill development, which causes protests from citizens, demonstrates the imperfection of town planning policy and the lack of effective mechanisms for considering residents' opinions when making decisions about new construction. The situation in the Orbita-1 microdistrict and the story of the former "Fata-Morgana" complex site are vivid examples of this problem.
For the further development and recovery of the construction industry in Karaganda, a comprehensive reform of the regulation and control system appears necessary. This includes both strengthening oversight of compliance with legislation when attracting funds from equity holders and obtaining construction permits, as well as increasing the transparency of company activities.
Special attention should be paid to creating mechanisms for considering residents' opinions in development planning, tightening economic sanctions for violations, and improving the regulation of housing construction cooperative activities. Only a systemic approach will solve the accumulated problems of the industry.
For potential property buyers, the history of the "RGB Group" and "Zhyloi Fond" companies serves as an important reminder of the need to thoroughly check the developer before purchasing. The company's reputation, the availability of necessary permits, the transparency of financial operations, and legal status — all these are key factors to consider when deciding to purchase a home.
One can hope that as a result of current changes, the construction market of Karaganda will become more civilised, transparent, and oriented towards the interests of citizens, and that unscrupulous business practices will gradually become a thing of the past. Nevertheless, this process will require the joint efforts of all interested parties — authorities, business, and society.