Source: www.rucriminal.info
A video of the participation of the ex-mayor of Almaty and his family was published on social networks from the island of Cyprus, from its Turkish side. Together with Bauyrzhan Baibek, four of his youngest children, his wife and mother are traveling, according to the Basyo YouTube channel.
“Presumably, Baibek is now on the run. Criminal cases initiated against the former akim of Almaty on the facts of embezzlement on an especially large scale are on Tokaev's desk. Tokayev has not yet made a final decision on Baibek, as well as on the oligarchs Kenes Rakishev and Rakhimbaev, ”the YouTube channel reports.
Kenes Rakishev is known as "Nazarbayev's wallet". How this wallet is replenished is in the investigation of Rucriminal.info.
In recent years, Kenes Rakishev led the BTA Bank asset recovery effort against its former chairman and owner, Mukhtar Ablyazov. Rakishev has been heavily criticized given the meager refunds the bank has been able to obtain and the colossal legal and investigative costs associated with the process. At the same time, critics pointed to the ineffectiveness of the strategy chosen by BTA Bank under the leadership of Rakishev.
The investigation revealed that while Rakishev led the failed attempts to recover the assets, he in turn also carried out secret transactions with BTA Bank, which enriched him personally and in doing so caused a significant loss to the bank. These transactions with related parties, including the sale of distressed personal assets to a bank at inflated prices, and the provision and write-off of bank loans. Such was the hypocrisy of Rakishev, who not only did not achieve his goals of returning the stolen money, but he himself appropriated at least $414 million from BTA Bank.
Rakishev's actions are equated with fraud against BTA Bank. There were no good commercial reasons for BTA Bank to engage in transactions with Rakishev's companies, and the sole purpose of these transactions was to obtain personal benefit for Rakishev and to transfer various losses that he incurred as a result of his personal investments to BTA Bank.
Analysis
The above conclusions are based on the analysis of the transfer of ownership of the following two companies from Rakishev to BTA Bank:
(i) Novatus Holding Pte Ltd (“Novatus”) based in Singapore; as well as
(ii) Romaltyn Ltd (“Romaltyn”) based in the Isle of Man.
Novatus was registered in May 2012 and at that time was wholly owned by Rakishev. It was used by him as an investment holding company for a number of personal business ventures, including the creation of Singapore-based private equity fund Singulariteam LP Pte ("Singulariteam"), which invested primarily in technology start-ups in Israel. Rakishev's business partner in this enterprise is the Israeli businessman Moshe Hogeg, who was arrested on suspicion of fraud, misleading investors and human trafficking for the purpose of sexual exploitation.
Novatus was also used to acquire and hold Rakishev's stake in NASDAQ-listed Net Element, a special purpose corporation (SPAC). It is reported that during Rakishev's participation in Net Element, the company lost almost all of its value, and Rakishev has since pulled out of the investment.
In addition, Novatus was used by Rakishev to make a $142,000 bank transfer to an associate of Hunter Biden, a transaction that was questioned in a US Senate report on alleged suspicious activity.
During 2017, Rakishev sold Novatus to BTA Bank. There was no good commercial reason for BTA Bank to acquire Novatus, whose activities have nothing to do with the core business of BTA Bank.
The sale of Novatus was arranged in such a way as to hide the fact that it was Rakishev, the owner of BTA Bank, who was selling the company to the bank. This was done using a third party as a corporate intermediary in the deal to keep Rakishev from appearing as the seller. The company used for this purpose was called TZVLManagement Ltd and was based in the UK. Its ultimate beneficiary is Dan Chernavsky, a disreputable lawyer and tax consultant who is a close associate of Gennady Bogolyubov and Igor Kolomoisky, the former owners of Ukrainian Privatbank. Bogolyubov and Kolomoisky are under investigation in the US for money laundering, and the latter has also been sanctioned by the US government for his activities against the Central Bank of Ukraine.
Within one month from May 3, 2017 to June 5, 2017, Novatus was transferred from Rakishev to TZVLManagement and then transferred to Sterling Trustees Limited based in the British Virgin Islands. Sterling Trustees held Novatus shares on behalf of BTA Bank until June 14, 2018, after which the bank became a direct shareholder of the company. Due to the short length of time that TZVLManagement owned Novatus (one month), very it appears that Rakishev engaged this company to avoid a direct sale of his personal asset to BTA Bank, which could be considered a related party transaction.
Information about the price at which Rakishev sold Novatus is contained in TZVLManagement's 2017 financial statements, which mention an investment of $340 million. Given the company's previous history, it is reasonable to assume that this entire amount consisted of the purchase of Novatus shares, which thus generated a net financial gain of $340 million for Rakishev.
Immediately after the sale of Novatus by Rakishev, the company began to lose value. BTA Bank's 2018 financial statements show that after receiving Novatus shares, BTA Bank recorded a loss on this investment of approximately KZT 14.5 billion (approximately USD 43 million at the June 2017 exchange rate). The poor performance of Novatus was also reflected in BTA's 2019 financials, which stated that "in December 2019
year, all ordinary shares were fully depreciated and transferred. In other words, two and a half years after buying Novatus from Rakishev, BTA Bank wrote off the entire cost of Novatus, resulting in a $340 million loss.
The second company sold by Rakishev to BTA Bank was Romaltyn. It is an Isle of Man-based company that was established in 2006 as a joint venture between Kazakhgold and Britain's Oxus Gold to bid for a gold mine in Romania. The ownership of the company was later transferred to Polyus Gold.
Rakishev acquired Romaltyn in April 2012 for $20 million using Mark Global Corporation from the British Virgin Islands. In 2013, Rakishev ceded a 49% stake in Romaltyn to the former Prime Minister of Moldova, Ion Sturza. The latter's stake in Romaltyn was acquired through the Seychelles-based Millenium International Resources Corporation Ltd. Sturza remained a shareholder of Romaltyn until November 2016, after which all ownership of the company returned to Rakishev.
In January 2018, BTA Bank received 100% of Romaltyn as "debt repayment from the borrower". This indicates that the borrower, most likely Romaltyn or its parent company controlled by Rakishev, received a loan from BTA Bank secured by Romaltyn shares, and that the principal amount of the loan was not returned by the lender to BTA Bank, which instead accepted the entire block of Romaltyn shares.
According to an independent estimate cited in BTA Bank's annual report, the value of Romaltyn's investment was 23,949,000,000 tenge, which is about US$74 million at the exchange rate at that time. This suggests that the loan provided by BTA Bank to the borrower should have been equal to or greater than this amount.
After its transfer to BTA Bank, the value of Romaltyn quickly depreciated. As at 31 December 2018, BTA Bank recognized impairment of Romaltyn assets in the amount of KZT 14,400,000,000 (i.e. 60% of the value assessed earlier in the same year). As of December 2020, the investment in Romaltyn has been impaired to nil according to an independent report prepared in April 2021.
Thus, the sale of Romaltyn allowed Rakishev to transfer an unpromising asset to BTA Bank, shifting the loss of at least 23.9 billion tenge (74 million US dollars) to BTA Bank.
The Novatus and Romaltyn companies were Rakishev's personal investments. Novatus was a vehicle for private investment, mainly in information technology, while Romaltyn owned a gold mine in Romania. BTA Bank did not have good commercial reasons for acquiring
neither company, but between 2017 and 2018, the bank acquired Novatus for $340 million and swapped a $74 million loan for the entire stake in Romaltyn. Within two years, both companies were impaired to zero, resulting in an aggregate loss of BTA Bank of $414 million.
To be continued
Alexey Ermakov
Source: www.rucriminal.info
