ANALYTICS KLEPTOCRACY

Bank RBK: Behind the Scenes

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The fate of Bank RBK for the next cou­ple of years has been deter­mined – the finan­cial insti­tute will be res­cued and con­tin­ue to work. However, despite the numer­ous ver­bal inter­ven­tions of the Kazakh offi­cials and the detailed expla­na­tions giv­en by the National Bank of Kazakhstan and the new Bank RBK man­age­ment, cer­tain ques­tions remain unan­swered.

How did it hap­pen that Bank RBK, a top ten finan­cial insti­tute in Kazakhstan, had de-fac­to gone bank­rupt?

  • Who are these share­hold­ers that, in the words of Nursultan Nazarbayev, had robbed the bank?
  • Which top-man­agers had assist­ed in this process?
  • Why did Akorda choose to save the bank and who had influ­ence on the deci­sion-mak­ing process?
  • Why, dur­ing the past months, despite the numer­ous indi­ca­tions of the bank’s finan­cial insol­ven­cy, the NBK had been delay­ing its response?
  • Which per­sons had been putting pres­sure on the reg­u­la­tor for the lat­ter not to appoint a bank­rupt­cy admin­is­tra­tion, to sus­pend (or even revoke) the bank’s license?

We are cer­tain that these and many oth­er ques­tions will remain unan­swered due to the del­i­cate and sen­si­tive nature of this mat­ter for Akorda. Therefore, we will try and recon­struct the behind-the-scenes side of the affairs con­cern­ing Bank RBK and asso­ci­at­ed process­es.

According to the Kazakhstan Stock Exchange (KASE) data, the list of those hold­ing sig­nif­i­cant shares of Bank RBK for the past four years includes these per­sonas.

Since the minor­i­ty share­hold­ers were in no posi­tion to steal Bank RBK funds, some of the afore­men­tioned phys­i­cal and (or) judi­cial bod­ies are among those respon­si­ble for the crit­i­cal finan­cial sit­u­a­tion at the bank and the fact that, with­out the mas­sive state sup­port, it would have instant­ly gone bank­rupt.

By the way, these bod­ies include some of those rather close to Nursultan Nazarbayev. First, there is the Directorate of Property Management “Fund Invest” con­trolled by the Fund of the First President of Kazakhstan man­aged by Dariga Nazarbayeva. Second, there is Kayrat Kamatayevich Sharipbayev, the cur­rent hus­band of the president’s eldest daugh­ter. Third, there is Bolat Abishevich Nazarbayev, the president’s broth­er.

In the mean­time, Akorda, via the Kazakhstan gov­ern­ment and the NBK, for some rea­son, has par­tial­ly shift­ed the respon­si­bil­i­ty for the bank’s crit­i­cal con­di­tion onto Vladimir Sergeevich Kim, a Forbes-Kazakhstan list­ed bil­lion­aire and a co-own­er of some major Kazakhstan cop­per min­ing com­pa­nies. The Kazakhmys Corporation con­trolled by Kim has assumed the oblig­a­tion to invest 160 bln tenge in Bank RBK res­cue oper­a­tion.

The rea­sons why such a deci­sion was made (and, undoubt­ed­ly, by Nursultan Nazarbayev him­self, oth­er­wise, Kim would have dis­put­ed it) and why Kim agreed to bear such heavy costs, remain a mys­tery. And it is unlike­ly that the state will share this secret with the pub­lic and the mar­ket unless some infor­ma­tion leak­age is to occur.

As for the cur­rent share­hold­ers of Bank RBK both the major­i­ty and the minor­i­ty ones, the board of direc­tors have offered them to buy back an addi­tion­al com­mon vot­ing stock issue in the amount of 70 bln tenge.

Therefore, the total vol­ume of Bank RBK finan­cial sup­port will amount to 474 bln tenge of which 160 bln are to be invest­ed by the Kazakhmys Corporation, 70 bln – by the bank’s share­hold­ers, 244 bln – by the NBK.

Is it per­son­al­ly Vladimir Kim who bears respon­si­bil­i­ty for the bank’s finan­cial sit­u­a­tion? We can­not say this with cer­tain­ty. On the one hand, from November 4, 2014 to September 14, 2017, the bank was chaired by Igor Mazhinov who is said to be Vladimir Kim’s son-in-law. And since the steal­ing of the mon­e­tary funds could not have hap­pened with­out the bank chairman’s par­tic­i­pa­tion, we may assume the old­er rel­a­tive has to answer for the younger one.

However, anoth­er option is also pos­si­ble. Up until the fall of 2014, Bank RBK was under the con­trol of the mem­bers of the Nazarbayev fam­i­ly who prob­a­bly active­ly took out loans and then, when it became a prob­lem, gave this finan­cial insti­tute away to Vladimir Kim who lob­bied his son-in-law’s appoint­ment as the chair­man. The lat­ter, how­ev­er, was unable to redeem the sit­u­a­tion.

The sec­ond sce­nario is con­firmed by the fact that nei­ther Nazarbayev nor the NBK has ever released the names of the share­hold­ers sus­pect­ed of steal­ing Bank RBK funds even though it would be quite com­mon for the Kazakhstan prac­tices.

However, the fact that Mazhinov’s pre­de­ces­sor Marpu Zhakubayeva who, after his appoint­ment as the chair­man, became his first deputy is now, once again, the per­son in charge speaks against this sce­nario.

Judging by Bank RBK share­hold­ers’ per­son­nel deci­sions, undoubt­ed­ly, dic­tat­ed by Akorda, if they choose to find the scape­goats, Igor Mazhinov or Marpu Zhakubayeva will be on the list.

By the way, observ­ing the may­hem with Bank RBK board mem­bers, we have con­clud­ed that sev­er­al clans had been try­ing to res­cue it includ­ing that of Mazhilis Speaker Nurlan Nigmatullin. His son Nurkhan Nuranov had even worked there for about two months as the deputy chair­man. However, all these “res­cuers” did not have the nec­es­sary finan­cial resources. Therefore, the mat­ter reached the pres­i­den­tial lev­el at which they made the deci­sion.

Meanwhile, accord­ing to our esti­mates, giv­en the vol­ume of the prob­lem loans amount­ing to 600 bln tenge that need to be moved to a spe­cial finan­cial com­pa­ny, the 434 bln tenge of the allo­cat­ed state sup­port are clear­ly not enough. Therefore, we can pre­dict that, just like it was in BTA Bank case, the ques­tion what to do with it will be raised once again in a cou­ple of years.

And then, if the mon­e­tary funds of Bank RBK went in the direc­tion of Vladimir Kim and the affil­i­at­ed busi­ness-struc­tures, any­thing will be pos­si­ble includ­ing the bank­rupt­cy of the finan­cial insti­tute, open­ing a crim­i­nal case, and a new many-hun­dred-bil­lion-dol­lar por­tion of the mon­e­tary inflow from the investors.

If it turns out that Nursultan Nazarbayev rel­a­tives are respon­si­ble for Bank RBK prob­lems and Nazarbayev will still be in pow­er, the state will be forced to res­cue the finan­cial insti­tute once again. Otherwise, the polit­i­cal dam­age from its bank­rupt­cy will cer­tain­ly be much greater than the finan­cial loss­es from yet anoth­er “res­cue” oper­a­tion.

Author: KazakhSTAN 2.0

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