Relatives of the head of the Department of Medicines and Medical Devices, Nurdin Kagazdiev, periodically win medical tenders for millions of soms – in some cases due to the fact that they compete with each other.
Journalists studied thousands of tenders and found out that over six and a half years, companies associated with the relatives of the head of the Department of Medicines and Medical Devices (DLSMD) Nurdin Kagazdiev won medical tenders worth more than 350 million soms.
Of the total number of tenders won, contracts for 7 million soms were awarded due to what experts call “imitation of competition”, and other public procurements for more than 130 million soms have signs of a conflict of interest between the supplier and the procuring entity
Until April 2022, the public procurement law prohibited companies with the same founder and head from participating in tenders. However, the firms of Kagazdiev’s relatives formally circumvented this ban by registering companies for various family members and relatives.
Despite the fact that maneuvers with the involvement of relatives in public procurement began to be considered a violation after the adoption of the new law, experts believe that the participation of firms of the official’s relatives in the same tenders can be called “imitation of competition” even under the previous version of the law.
In total, the journalists managed to find at least six companies that were managed or owned by various relatives of Kagazdiev, including his father, cousin, cousin, aunt and sister of his wife.
“You can ask your close relative, say: “Come on, participate, I will bid five soms cheaper, you will be more expensive, we will divide the tender in half.” not a hundred million, but more. There is no other point in creating several companies.”
Gulmira Abdyrazakova
Chairman of the Board of the Forum on Transparency and Accountability in Public Procurement
Possible conflict of interest
The very fact that there are relatives who are engaged in business in the same area where Kagazdiev works indicates a conflict of interest, which the official had to declare in order to conduct an internal investigation.
Not only do the official’s relatives have companies that win tenders, but they also own pharmacies and import medical supplies and equipment, all of which are overseen by Kagazdiev’s department.
Interviewed experts believe that such conditions deprive the head of the department of objectivity.
“Even if he did not personally sign the certification or licensing documents, there will still be no objectivity. Because it could affect employees. There should be an internal investigation,” says Abdyrazakova.
Kagazdiev claims that there was no official investigation into the presence of family ties. According to him, he has no influence on the victories of his relatives in tenders, and his family has been in the pharmaceutical business for a long time – and, as he says, their business is not going very well now.
“Look, my dad opened a company in Talas in 1993, I won’t lie. Dad, when he was carrying goods, I was small and helped him. I am the only son at home. They did everything for me. They used to work well before. Now they have practically no work, there is a lot of competition. There are two or three pharmacies left, and that’s it, and they will close soon.”
Nurdin Kagazdiev
Director of the Department of Medicines and Medical Devices
It is quite difficult to check the words of Kagazdiev in practice. However, it can be argued that one of the companies of his relatives in April last year almost received a preferential right to supply medical and other goods to government institutions without tenders.
Such a measure to create a list was explained by the need to avoid bureaucratic mechanisms during the coronavirus pandemic, when medical and other institutions needed medicines and protective equipment, and the decline in economic indicators in several industries.
In this case, Fameco (formerly Camelyn Asia) wanted to allow the supply of medical masks, respirators, protective overalls, shoe covers, medical gowns, medical caps and special clothing without tenders.
However, the initiative was not accepted in the end – a representative of the public procurement department said that the document “is now just standing there.”
Prior to the consideration of this draft resolution, one of the companies of the official’s relatives, Intermed LTD, had already actively participated in tenders to combat coronavirus. In 2020, it entered the top 5 companies that spent almost 20 percent of the total budget related to procurement for the fight against COVID-19, concluding contracts worth more than 900 thousand dollars (69 million soms) to provide hospitals with protective equipment, medicines, consumables and other medical supplies.
Private contractor NCOMiD
One of the most frequent customers of companies associated with Kagazdiev’s relatives is the National Center for Maternal and Child Welfare (NCOMiD).
There, firms of relatives of the chief pharmacist won contracts worth 133 million soms. And also, several key complaints about the companies of Kagazdiev’s relatives are connected with the NCM&D.
The Accounts Chamber found out in 2017 that Fameko (Camelyn Asia) supplied the equipment at a price almost three times higher than the factory price, which was about 6 million soms.
“In fact, Camelyn Asia LLC, according to acceptance certificates and invoices, delivered identical equipment with the same name to NCM&D, but already at a price of 14.5 million soms,” the report says.
In the summer of 2022, in another complaint, Fameko’s competitor, Amika, wrote that it did not understand how the company of the Kagazdievs’ relatives won without meeting the requirements in the tender for 57 million soms.
“[…] how is it that a company that meets the procuring entity’s qualifications becomes non-compliant, and a company that does not qualify becomes compliant?” – wrote the representative of “Amika”.
Nuria Toktogulova, the official’s cousin, confirms that companies registered to her and other relatives have won tenders at the national center. However, she does not consider this to be an imitation of competition.
“We can participate with everyone. Whoever submits the application will participate. I can’t stop my brother from participating.”
Nuria Toktogulova
Entrepreneur
One of the companies where Toktogulova is a director, ElChi Pharm, was suspected of having family ties between its management and the former director of the National Center for Foreign Affairs, Kamchibek Uzakbaev. This company has also periodically won national center tenders.
According to Toktogulova, she no longer works at ElChi Pharm, and she was not at all familiar with the founder of the company, Zarema Kamchybekova. The journalists could not find direct links between the owner and the former director of the national center, except that Kamchybekova and Uzakbaev’s son are the founders of the same political party, El Talaby.
However, Toktogulova admits that she knows Uzakbaev himself well – she says that this acquaintance helped her also register the pharmacy center of the national center.
“I asked him (Uzakbaev) for a long time for these pharmacy points. Those who were before me were ending their lease, and he gave me this room. […] When she left ElChi Pharm, she re-registered to her company. Naturally, it should be yours”
Nuria Toktogulova
Entrepreneur
Uzakbaev himself was not available for comment – he did not respond to calls and messages on social networks through which he could be contacted.
Reason enough to investigate
Chairman of the Board of the Forum on Transparency and Accountability in Public Procurement, Gulmira Abdyrazakova, believes that there are more than enough reasons to investigate the links between companies associated with Kagazdiev’s relatives and the NCM&D.
“Just on all fronts, explore and understand where the connection is. That’s what anti-corruption measures are for. […] For example, one medical institution is also involved in procurement and they have issues with pharmacies … and if a relative is also in charge, then this issue definitely needs to be checked for corruption, ”Abdyrazakova said.
One of the interviewed lawyers believes that if a connection between the supplier and the national center is found, which may indicate a direct conflict of interest, then the former director or other official may be held liable.
“If the procuring organization is a state one, then yes, this is a direct conflict of interest. Knowing they are affiliates […] they had to refuse the terms of this tender,” said one of the lawyers, who insisted on anonymity.
The medical experts interviewed said that medical tenders are one of the investigated corruption schemes in the healthcare system, and that when they are discovered, tenders are most often reviewed.
“From my experience in the healthcare system for 25 years, I have seen complaints, proceedings related to such cases. If the public, civil activists paid attention to them, then such tenders were reviewed,” said Elena Bayalinova, an expert in the field of Kyrgyz healthcare.
Former healthcare worker Bermet Baryktabasova says that nepotism in Kyrgyz medicine is a common practice for officials in positions in the healthcare system:
“There was a large commission in the DLO and, following the results of the investigation, [бывшего] director was opened several criminal cases. Employees were also identified with connections, relatives in the pharmaceutical business, their own pharmaceutical companies.”
According to her, many people know about the connections of officials with companies, and such connections should be thoroughly checked.
“Necessary […] declare income, all family ties of drug officials in the pharmaceutical business, at tenders – who is distant relatives to whom, through a wife or children … This must be kept under the control of the fiscal authorities, ”concludes Baryktabasova.
Nurdin Kagazdiev noted that he does not hold on to power and is ready to leave the post of Director of the Department at any time.
“I told everyone and will continue to say – I don’t hold on to power. I tell anyone who comes, I am ready to leave my position at any time. I don’t care where I work. I am from a wealthy family. I don’t need anything. Please, if you need a lot – take it. That’s my position.”
Nurdin Kagazdiev
Director of the Department of Medicines and Medical Devices
From the response of the General Prosecutor’s Office of the Kyrgyz Republic
From 2012 to June 2022 inclusive, 167 criminal cases related to public procurement were initiated.
154 leading cases are related to state bodies
13 criminal cases linked to private companies
A significant part of the defendants in these crimes are officials, employees of the Ministry of Health of the Kyrgyz Republic.
