Ukraine’s banking sector continues to work steadily even during the war. However, investors of individual financial institutions risk getting problems with their funds. We are talking about banks owned by businessmen cooperating with the aggressor country. Among these, in particular, is BTA Bank (Ukraine), owned by Kazakh businessman Kenes Rakishev, who is closely connected with Russia, writes Antikor.
Recently, President of Ukraine Volodymyr Zelensky signed a law allowing the nationalization of systemically important banks without additional capitalization of financial institutions. Alfa-Bank Ukraine, in which Russian billionaire Mikhail Fridman has a stake, may be the first to fall under the document. The oligarch is under the sanctions of the National Security and Defense Council and speaks of a desire to cooperate with the Ukrainian state. For example, Friedman and the company announced their readiness to capitalize the Ukrainian subsidiary of Alfa-Bank by $1 billion or even transfer shares to our state if the Ukrainian authorities make such a decision. Moreover, the assets of the scandalous Ukrainian oligarchs Kolomoisky, Bogolyubov, Zhevago and others have already become the property of Ukraine.
Obviously, the cooperation of Mikhail Fridman with the Ukrainian state will allow depositors of the local Alfa-Bank not to worry about their funds. After all, there is a desire on both sides to find a mutually beneficial position. But there are also those banks whose owners, while fruitfully cooperating with Russia and financing its terrorist acts, do not want to make contact with Ukraine. One of these is BTA Bank (Ukraine), whose parent company has long been owned by the Kazakh oligarch Kenes Rakishev, a raider, a relative of Nursultan Nazarbayev and a longtime friend of the terrorist Ramzan Kadyrov.
The influential Kazakh is closely connected with Russia by business affairs. In particular, in December 2017, he became the largest shareholder of the UK-registered Russian gold mining company Petropavlovsk, having acquired a 22.4% stake from Russian oligarch Viktor Vekselberg and JSC Metcombank. The agreement was drawn up through the Cypriot company Fincraft Holdings Ltd., controlled by Rakishev.
In addition, Kenes Rakishev owns SAT-Moscow LLC, whose modest name hides significant assets and permits for gas production, construction, real estate services, legal services, and so on in the Russian Federation. It is SAT-Moscow that sponsors the Chechen football club Akhmat, whose budget has suffered due to sanctions imposed on the owner of the football club, Ramzan Kadyrov, with whom Kenes Rakishev has had friendly relations for many years.
Due to the connections of the billionaire with the Russian occupiers, the funds of the depositors of BTA Bank (Ukraine) are under threat. Not so much nationalization in accordance with Ukrainian legislation, because then citizens will be paid by the Deposit Guarantee Fund. The risks are associated precisely with the figure of Kenes Rakishev, who, both in banking and in other areas of his business activities, became famous as a fraudster and schemer. In particular, the budget of his native Kazakhstan suffered greatly from the actions of the oligarch. 346″ alt=”Rakishev Kadyrov” />
How Rakishev robs Ukraine through his companies: Novatus is a dubious company for dubious investments
A few years ago, Kenes Rakishev, being the owner of the Kazakh BTA Bank, generously financed from the budget of this country thanks to the oligarch’s connections with the top political leadership of Kazakhstan, made secret agreements with the financial institution, which enriched him personally and at the same time caused significant damage to the bank itself. Related party agreements included, in particular, the sale by BTA of the businessman’s troubled personal assets at inflated prices, and the provision and subsequent write-off of bank loans to these dubious firms. As a result of the transaction, Rakishev embezzled about $414 million from BTA Bank, which was financed by government subventions.
Kenes Rakishev transferred the right to BTA Bank ownership of two of their companies:
1) Novatus Holding Pte Ltd (“Novatus”) based in Singapore;
2) Romaltyn Ltd (“Romaltyn”) based on the Isle of Man in the Irish Sea.
Novatus was registered in May 2012 and at that time was wholly owned by Rakishev. The firm was used by a businessman as an investment holding company for a number of financial transactions. Including the establishment of a private equity fund based in Singapore, Singulariteam LP Pte (Singulariteam). The fund, in turn, invested mainly in technology startups in Israel. Rakishev’s business partner in this enterprise was the Israeli entrepreneur Moshe Hogeg, who was arrested on suspicion of fraud, misleading investors and human trafficking for the purpose of sexual exploitation.
Novatus was also used by businessmen to buy and hold Rakishev’s stake in Net Element, which was listed on the NASDAQ exchange. But with the participation of a businessman in Net Element, the company lost almost all of its market value, and since then Kenes Rakishev has stopped investing in it.
In addition, Novatus was used by the oligarch to make a bank transfer of 142 thousand dollars to the partner of the son of the current US President Joseph Biden, Hunter Biden. The transaction was then questioned in the US Senate report as suspicious.
In 2017, Kenes Rakishev sold Novatus to his own BTA Bank. At the same time, the bank had no significant commercial reasons for acquiring such a controversial asset, the activities of which had 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 himself. The agreement was carried out using a third party as a corporate intermediary so that Kenes Rakishev would not appear as a seller. The company used for this purpose was called TZVL Management Ltd and was based in the UK.
Its ultimate beneficiary is Dan Chernavsky, a lawyer and tax consultant with a dubious reputation, a close associate of the Ukrainian oligarchs Gennady Bogolyubov and Igor Kolomoisky, former owners of the Ukrainian PrivatBank. Bogolyubov and Kolomoisky are under investigation in the United States for money laundering, and the latter has also been sanctioned by the US government for his activities against the Central Bank of Ukraine. Meanwhile, the assets of these and other Ukrainian oligarchs have passed to the state.
And back to the deal with Novatus. Within one month (from May 3, 2017 to June 5, 2017), the asset was transferred from Kenes Rakishev to TZVL Management, and then transferred to Sterling Trustees Limited, based in the British Virgin Islands. The latter firm owned Novatus shares on behalf of BTA Bank until June 14, 2018, after which the bank became a direct shareholder of the company. After a short period during which TZVL Management owned Novatus (only one month), it is obvious that Rakishev attracted this firm in order to avoid direct sales of his personal asset to his own BTA Bank, which could be considered a fraudulent agreement with a related party.
Information about the price at which the Kazakh oligarch sold Novatus is contained in the TZVL Management reports for 2017. It mentions an investment of $340 million. Given the previous history of the company, it can be assumed that all this money went to buy Novatus shares. Therefore, the agreement brought Rakishev a net profit of $ 340 million, and the same damage to his banking institution.
Immediately after the sale of Novatus by Rakishev, the company began to lose market value. BTA Bank’s 2018 financial statements show that after receiving Novatus shares, the bank recorded a loss on this investment of approximately KZT 14.5 billion (approximately USD 43 million at the June 2017 exchange rate). The negative performance of Novatus was also reflected in BTA’s 2019 financial statements, which states that in December 2019 all shares were fully depreciated. That is, two and a half years after the acquisition from Rakishev, BTA Bank wrote off the entire cost of Novatus, which caused a loss to the financial institution in the amount of $340 million (the amount that the bank invested in the purchase of a dubious company).
Romaltyn is a player in the market of fictitious tenders
The second company that Kenes Rakishev sold to his own BTA Bank was Romaltyn. It is registered on the Isle of Man and was established in 2006 as a joint venture between Kazakhgold and British Oxus Gold to participate in a fictitious tender for the purchase of a gold mine in Romania. Later, the ownership of the company was transferred to Polyus Gold.
Kazakh billionaire Kenes Rakishev acquired Romaltyn in April 2012 for $20 million using Mark Global Corporation from the British Virgin Islands. In 2013, the businessman transferred 49% of the shares of Romaltyn to the former Prime Minister of Moldova, Ion Sturza. Part of the latter in the company, in turn, was acquired through the Seychellois firm Millenium International Resources Corporation Ltd. Sturza remained a shareholder of Romaltyn until November 2016, after which all ownership rights returned to Rakishev.
In January 2018, the Kazakh BTA Bank received 100% of the shares of Romaltyn in the form of debt repayment from the borrower. That is, the borrower – the same Romaltyn or its parent company controlled by Rakishev – received a loan from BTA Bank secured by its own shares. As you may have guessed, the principal amount of the loan was not repaid by the lender of BTA Bank, so the financial institution was forced to take the entire stake in Romaltyn.
According to an independent assessment appearing in the annual report of BTA Bank, the value of Romaltyn’s investments amounted to approximately 24 billion tenge (about 74 million US dollars at the exchange rate at that time). That is, the loan provided by BTA Bank to the borrower should have equaled or exceeded this amount.
After his transfer of shares, the value of Romaltyn, like the aforementioned Novatus, quickly went down. As of December 31, 2018, BTA Bank recognized the impairment of Romaltyn assets in the amount of 14.4 billion tenge (i.e. 60% of the value previously estimated). As of December 2020, investments in Romaltyn were impaired to zero.
Thus, the sale of Romaltyn allowed Kenes Rakishev to transfer an unpromising asset to BTA Bank, transferring a loss of at least 23.9 billion tenge (74 million USD) to BTA Bank.
Novatus and Romaltyn were Rakishev’s personal investments. Novatus was founded for private investment, mainly in the field of information technology, while Romaltyn owned a gold mine in Romania. BTA Bank had no compelling commercial reasons to acquire any of them, however, between 2017 and 2018, it acquired Novatus for $340 million and exchanged a $74 million loan for the entire stake in Romaltyn. Within two years, both companies were depreciated to zero, as a result of which the total loss of BTA Bank amounted to $414 million. In fact, Rakishev stole this money from the budget of Kazakhstan, from which there were subventions for the work of BTA Bank.
The same can happen with the funds of depositors of the Ukrainian BTA Bank
The subsidiary of the Kazakh oligarch – BTA Bank JSC (Ukraine) – continues to work in our state. The Ukrainian authorities have not yet announced the possible nationalization of a financial institution due to the fact that its owner is cooperating with Russia. However, working capital in the local “daughter” of BTA then goes to the parent company in Kazakhstan. And from there they are either sent to support Russian terrorists and their crimes on the territory of Ukraine, or, as in this case, they are spent on fraud invented by the owner of the bank, Kenes Rakishev.
At the same time, the oligarch continues to cooperate with the aggressor country, but not included in the sanctions lists of the National Security and Defense Council or the EU. Therefore, nothing prevents a businessman from financing, for example, the terrorist groups of Ramzan Kadyrov. And while official Kazakhstan, represented by President Tokayev, is distancing itself from Russia by all means, individual representatives of the state continue to do business on the territory of the aggressor country and be friends with local figures.
DOSSIER: Kenes Rakishev: Kazakh mafia in the steppes of Ukraine. PART 1
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