26 мая 2023
Paolo Sorbello, photo from tek-kaz.kz

The Week in Kazakhstan: We Have a Problem

Massimov seeks appeal, France reopens the case against Ablyazov

The Week in Kazakhstan: We Have a Problem

Kazakhstan’s President Kassym-Jomart Tokayev visited Moscow to attend the Eurasian Economic Forum, a regular meeting of the leaders of the Eurasian Economic Union (EAEU) on May 24. Interestingly, Tokayev highlighted how the peculiar cooperation between Russia and Belarus, two of the other founders of the EAEU in 2014, has created a “Union State”, which creates a two-level integration in the Union.

TEK-Kazakhstan, a company serving as a trading house, was sentenced to pay a fine of 1.1 billion tenge (around $24.5 million) and to return illegally obtained funds totaling 579 million tenge (around $1.3 million). TEK is affiliated with Timur Kulibayev, one of Kazakhstan’s richest businessmen and son-in-law of former President Nursultan Nazarbayev, and with Anuar Ushbayev, the owner of Tengri Partners, a venture capital firm.

A city court in Astana confirmed on May 22 that Karim Massimov’s lawyers are planning to file to appeal his sentence. Former head of the National Security Committee and Nazarbayev’s right-hand man, Massimov was sentenced in April to 18 years in prison for high treason, connected to Qandy Qantar (Kazakh for “Bloody January”), an event of January 2022 that Kazakhstan’s leadership considers to be a failed coup. At least 238 people were killed during the repression of the protests.

Kazakhstan’s Central Bank maintained the base interest rate at 16.75% on May 26, because of improving economic indicators. Inflation, which worried the government and the regulator, has slightly slowed down, giving confidence towards growth forecasts. In 2023, the government expects Kazakhstan’s economy to grow by 4.2% - 5.2%.

Yerulan Zhamaubayev, deputy prime minister and minister of finance, said on May 24 that the government will look into the issue of the trade vector that brought drones and other military equipment through Kazakhstan to Russia. Last week, a joint investigation carried out by iStories, Der Spiegel, OCCRP, and Vlast unveiled that several companies have circumvented Western sanctions and supplied Russia with drones and equipment that can be used for its war in Ukraine. These suppliers did so by trading with newly-established companies that Russian nationals opened in Kazakhstan.

Finance minister Zhamaubayev explained on May 24 that mining giant Eurasian Resources Group (ERG) is unable to disclose details about dividend payments because of an ongoing arbitration dispute with the Stati family, a Moldovan business group. The ministry of finance holds a 40% stake in ERG, which was targeted by the Statis, who are seeking compensation for what they consider an illegal nationalization of their investments in Kazakhstan.

The French Court of Cassation in Paris overturned the decision of the Court of Appeal to dismiss the trial against the former owner of BTA Bank, Mukhtar Ablyazov, who is accused of embezzling billions of dollars from the bank, French outlet Mediapart reported on May 23.

The General Prosecutor’s Office plans to create a special fund to channel the return of illegally withdrawn assets back into the country, the press service said on May 24. Kazakhstan’s government, parliament, and law enforcement officials have been vocal since Qandy Qantar about the return of capitals that were allegedly stolen and sent abroad. Official figures on the volumes of these capitals have changed often, with little to no detail being disclosed.

Marat Zhylanbayev, one of the leaders of the “Alga, Kazakhstan!” (Kazakh for “Forward, Kazakhstan!”) an unregistered party, was arrested for two months in Astana, local media said on May 25. He is accused of “his activities in a banned organization” and of “financing the activities of an extremist organization”. Alga, Kazakhstan! has repeatedly tried to register as a party, but their application was never accepted.

Bulat Abilov, a long-time opposition politician who came back to politics in 2022 after a hiatus, said he would no longer attempt to register his party, Bizdin Tandau (Kazakh for “Our Choice”), on May 25. The party sought registration with the Electoral Commission, but its application was repeatedly denied. This is the first of the parties that mushroomed since Qandy Qantar that shut its doors after a long election cycle, without having achieved an official registration.

Zhanbolat Mamai, who has served a long period in pre-trial detention, is now hospitalized due to worsening health conditions, his spouse said on May 20. Mamai, an opposition leader, was under arrest from February 2022 until November, when a court ordered to move him to house arrest. During the suspended sentence, which he said he will appeal, Mamai cannot engage in political activity, work in the media, or use social media resources.