Where is the money from? The authorities of Kazakhstan are going to ask this question to very few people. If these people fail to confirm their income is honest, their assets would be transferred to the state. A special law is about to be developed for the procedure. It can be another stage of nationalisation of assets that belong to representatives of the so-called old Kazakhstan.
How ‘New Kazakhstanis’ emerged
On March 16, 2022, after the January events, when a wave of protests occurred across Kazakhstan, President Kasym-Zhomart Tokayev delivered a message “New Kazakhstan: A path of renovation and modernisation.” This name became a ‘basis’ for setting new policy and new elite against ‘old Kazakhstanis’, i.e. those who were in favour before the January events.
In his message, Tokayev suggested to pursue political reforms: citizens must make decisions at the local and nationwide levels, there must be competition in the political sphere, Kazakhstan must step down from the superpresidency, which was during Nursultan Nazarbayev. Tokayev did not say the last phrase out loud, but he most certainly meant it. Because Nazarbayev built the power structure in Kazakhstan, which was mostly concentrated in the president’s hands, for over 30 years of his ruling.
In the same message, Tokayev said that the president’s close relatives would be banned from holding senior offices in civil service and quasi-public companies. Nazarbayev’s relatives held such offices and also had access to other administrative and economic resources. It allowed them to concentrate what is called a glut of wealth in their hands. The fortune of the eldest of three Nazarbayev’s daughters, Dariga, was estimated at 584 million dollars in 2022, and the one of her son and ‘concurrently’ grandson of Nazarbayev, Nurali Aliyev, was 263 million dollars. And the middle daughter of Nazarbayev, Dinara, and her spouse Timur Kulibayev have a capital of 3.9 billion dollars each. This is incredibly much from the point of view of the average Kazakhstani, who earned 299.8 thousand tenge (651 dollars) in 2022.
Moreover, just before the March message, the assets relating to the relatives of the first president were started to be returned to the state.
A subsidiary
The first one to get the business was private company “Operator ROP” established in 2015.
ROP stands for expanded obligations of producers, while the essence of the operator’s work is to collect disposal fees (for example, they are paid by car manufacturers) and to further distribute money between companies that “annihilate” clunkers, packaging and other hazardous waste.
According to the law valid in 2015, the government of the Republic of Kazakhstan could be the founder of a ROP. It was its right, not an obligation. In December 2015, the cabinet of ministers resolved not to be the founder of a Kazakhstan-based ROP, and transferred functions of collection and administration of disposal fees to a private limited liability partnership. The company was registered in November 2015 and ‘thoughtfully’ took the name of ‘Operator ROP’. The only founder of the LLP at the time was Aliya Nazarbayeva, the youngest daughter of Nursultan Nazarbayev. 
Back in 2016, the LLP had another owner – in fact, Shnar Muktarova became the owner. But the change of the owner ‘did not unlink’ the ‘Operator ROP’ from Nazarbayev’s daughter.
Thus, ‘Operator ROP’ transferred 102 billion tenge (221 million dollars, hereinafter at the rate of 2022, unless otherwise specified) to waste disposal companies from 2015 to 2022. Almost one fourth of this amount, or 24.6 billion tenge (53 million dollars) was received by Recycling Company. This is the only old car recycling plant in Kazakhstan. Aliya Nazarbayeva is the sole owner of the plant.
Debates over the need for the fee have continued from the moment of introduction of the disposal fee in the country in 2016. The public movement #Netutilsboru [notodisposalfee]was even created. In 2021, car owners of Kazakhstan launched a petition demanding to cancel the fee: the signatories calculated that it was the disposal fee that caused the double rise in car prices.
People were also annoyed with the fact that it was a private company, instead of the state one, that managed the funds, and it did not have to disclose the way it spent money. However, the government stood its ground: disposal fee will be charged.
The authorities heard the car owners only after the January events. On January 11, 2022, Tokayev ordered to revise disposal fee rates (they were decreased by 50 per cent), and to take the functions of ROP operator from the private company. According to him, the state company should perform these functions.
One week later, on January 18, 2022, the owner of ‘Operator ROP’, Shnar Muktarova, presented her enterprise to the republic – all functions of collection and administration of disposal fee transferred to state-owned joint-stock company “Zhasyl Damu”.
In January and March, vice minister of ecology Akhmetzhan Primkulov and ex-chiefs of “Operator ROP” Medet Kumargaliyev and Svetlana Korotenko were detained over the ROP case. In June, Shnar Muktarova, who presented the enterprise to the state six months earlier, was declared wanted. Antikor [Anti-corruption Service] suspects Muktarova of embezzlement of disposal fee money in 2017-2018, “which were illegally paid to her as dividends in the amount of 920 million tenge (nearly 2 million dollars).”
This year “Zhasyl Damu”, being the state-owned enterprise, must publish its operating statement for 2022. However, it is not time for the statement, so it is impossible to evaluate the performance of the state-run operator.
A present from the nephew
On March 13, 2022, the Anti-Corruption Service detained Kairat Satybaldy, one of Nursultan Nazarbayev’s nephews.
In the 90s and early 2000s, Satybaldy held senior positions in the National Security Committee (KNB), and then his career took a different course. For example, he was the vice president of the national company “Kazakh Oil”, the secretary of “Nur Otan” party, which his uncle, Nursultan Nazarbayev, founded and headed until November 2021.
In 2015, Kairat Satybaldy appeared in the business arena of Kazakhstan: he became the co-owner of Kaspi Holding, whose main asset was Kaspi Bank. Next year, Satybaldy having this asset was listed by Forbes as one of the most influential businessmen of Kazakhstan, and one year later he was listed as one of the richest businessmen with capital 150 million dollars.
In 2016, his company “Alatau Capital Invest” purchased 3.4 per cent of shares of the national operator “Kazakhtelecom”. In 2018, with the government’s approval, almost one fourth of shares of “Kazakhtelecom” became the ownership of the Luxembourg company, Skyline Investment Company S.A. Only in 2021, it became known that the owner of the Luxembourg company, and almost 30 per cent of shares of the national communications provider, was Kairat Satybaldy.
In April 2022, detained Satybaldy presented his stock of shares of “Kazakhtelecom” to the state. In the same month, Satybaldy (to be more precise, the company he owned) presented 100 per cent of shares of “Tsentr transportnogo servisa” [Transportation Service Centre – TsTS] to the state. The TsTS owned over 600 railroad side tracks (Kazakhstan has 3,658 railroad side tracks). Previously, before becoming the ownership of TsTS, these side tracks belonged to the national company “Kazakhstan temir zholy”, where Kairat Satybaldy was vice president in 2005-2006.
Now he serves in the penal colony. However, Antikor continues to investigate other cases regarding Kairat Satybaldy – over tax evasion and money laundering.
Gasification of charges
On March 17, 2022, security officials confirmed detention of dollar millionaire Kairat Boranbayev, who became relative with the Nazarbayevs in 2013. Boronbaev’s daughter was married to Aisultan Nazarbayev, son of Dariga Nazarbayeva and grandson of Nursultan Nazarbayev.
On April 25, the akimat (mayor’s office) of Almaty reported that Boronbayev transferred two LLPs to the state. Companies collect money from almost 12 thousand parking lots in Almaty, the biggest city of Kazakhstan. In 2021, the businessman privatised one of those companies.
However, now the shares of the said companies are registered for Boranbayev or companies controlled by him in the public register. CABAR.asia has sent a request to the akimat of Almaty asking to explain the data discrepancy.
“Registration of companies administering parking lots will be completed after termination of trials against chiefs of companies (chief of LLP “Alan Parking” Mukhtar Bazarbayev, and director of LLP “Almaty Spectechparking Service” Marat Prinbekov were detained in April 2022 – Editor),” the akimat said.
However, Kairat Boranbayev was put on trial not because of parking. He is accused of embezzlement of 14.5 billion tenge (31.5 million dollars) during gas supplies to the state-run “Qazaq Gaz” Joint-Stock Company. The businessman pleads not guilty, but he has already compensated for damages to the state.
As Kairat Boranbayev was under investigation in 2022, he was “removed” from the Forbes list. Journalists suggested that “assets controlled by him can decrease significantly” because of the situation.
However, the businessman seems to keep his fortune: he still owns or co-owns over 20 companies, including the McDonald’s franchise restaurant chain.
Market relations
In early February 2023, two pieces of news appeared about the termination of the “business career” of Bolat Nazarbayev, the younger brother of Nursultan Nazarbayev.
On February 1, the court of appeal upheld the decision of the lower court that stated that Bolat Nazarbayev privatised illegally the controlling stake of one of the largest markets of Almaty in 2013. The court found that the cost of the state stock was undercut five times.
On February 2, it became known that 300 thousand hectares of land were seized from Bolat Nazarbayev and returned back to state ownership. This area is comparable to the area of 3.5 such cities as Astana.
The land was returned by Amanat party members. Earlier, this party was called “Nur Otan” and had been one of the main political tools of Nursultan Nazarbayev for many years.
Presidential assets
Information about vast assets of the very Nursultan Nazarbayev appeared in January 2022. Investigative journalists found out that the first president of Kazakhstan controlled his billions in assets – banks, hotels, mobile operators, and many others – via charitable foundations. Jusan Bank was a tasty piece of cake.
Last June, journalists wondered if the asset would be seized from Nazarbayev. The question arose once parliamentarian Kanat Nurov was outraged over the fact that the bank in 2020 paid out over 113 billion tenge (nearly 250 million dollars) in dividends to its shareholders. But half of its profit, Jusan Bank earned with the assistance of the state.
The deputy called this decision on dividends amoral in the given situation and asked the government to assess the damage caused by support measures provided to Jusan Bank by the state and decide how to return the money to the state.
It seemed impossible back then that property would be seized from once powerful elbasy (leader of the nation – the status of Nazarbayev until February 2023). But early this year Aslan Sarinzhipov, head of the “Nazarbayev Fund” (Nazarbayev is the owner of the fund; Jusan Bank belongs to the fund via a complicated scheme of intermediary firms) made a sensational statement: control over the bank was lost.
Another sensation was that, according to Sarinzhipov, the control was seized by representatives of old Kazakhstan. It took place after the January events, when ‘old Kazakhstanis’ were actually deprived of power. According to Sarinzhipov, he applied to the General Prosecutor’s Office to get the “seized asset” back. The prosecutor’s office answered and filed a suit to get control over Jusan back to Kazakhstan.
Meanwhile, in 2022, which was critical for the Nazarbayev family, Dariga Nazarbayeva rejoined the list of the richest businesspersons of Kazakhstan. Moreover, Nurbol Nazarbayev, son of Bolat Nazarbayev, appeared on the list. They probably expect that public recognition of their assets (neither Dariga Nazarbayeva, nor Nurbol Nazarbayev denied the investigation by Forbes Kazakhstan) could become a kind of ‘security blanket’ for the disgraced family as it would be harder to take away business in public.
Gifts are detrimental to the image
The way of nationalisation via giving assets as gifts to the state is “rather barbaric”, according to Andrei Chebotarev, financial analyst, author of Telegram channel Finance.kz.
“I was against it because it makes a negative impact on the investment appeal of Kazakhstan. When a foreigner reads our news, and translates via google translate the piece of news about a businessman who executed a gift deed for a billion-dollar business while being in detention, he thinks, ‘I will move to another jurisdiction because if I have business here and they ask me to give it away as a gift in three years, I won’t be able to refuse,” Chebotarev explained the logic of the investor.
He specified that everyone in Kazakhstan knows why a person would give assets in billions of tenge to the state as a gift, “We know who that person is, what his relationships with the power were, and we know that the situation has changed. But such news published without explanation is very bad from the point of view of a foreign investor.”
Daniyar Temirbayev, executive director of Qazaq Association of Minority Shareholders (QAMS), focuses attention on the fact that their association could hardly be suspected of sympathy for Kairat Satybaldy, QAMS, for example, criticises regularly Kazakhtelecom, where Satybaldy’s company was the shareholder. Nevertheless, according to Temirbayev, giving assets as a gift looks like an unfair deal.
“Over time, Satybaldy will have the right to say that the deal was performed under pressure as he was detained, and to ask to find it invalid,” Temirbayev said. “This deal will look like the asset was “seized.” But in case of ‘seizure’ of assets, we have bleak prospects – the new power will seize them from the old one. And it can repeat over and over again.”
According to Temirbayev, law enforcement bodies of Kazakhstan should have investigated how the assets became the property of Satybaldy so that investors do not have questions about the purity of the deal. “If it was done illegally, the investigation and trial should have been held. Then, there would be no questions about how the asset returned to the state ownership,” Daniyar Temirbayev said.
According to Andrei Chebotarev, a long and complicated way should be taken when assets are being returned to the state – you should prove to court that privatisation was illegal or that assets were obtained in a criminal way. And then the assets could be returned to the state.
CABAR.asia wondered if the pending law on the return of illegally withdrawn assets to the state could become the tool of reprisal of ‘new’ Kazakhstan against ‘old’ Kazakhstan. According to financial consultant Rasul Rysmambetov, there is such a risk, “I can already see how those who pretend to be ‘new’ and advanced Kazakhstanis raid on ‘old’ ones, those who have improperly registered ownership of any given assets.”
To make local businesses and foreign investors feel comfortable in Kazakhstan, we need to build the rule-of-law state, Daniyar Temirbayev said:
Main photo: Tatiana Trubacheva