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ATF Bailout Puts Focus on Chairman Yessenov’s Political Connections

ATF Bank has received another multi-million dollar bailout from Kazakhstan’s government, prompting scrutiny of the political connections of its chairman and owner Galimzhan Yessenov.

When ATF, the fifth-largest bank in Kazakhstan, received a 100 billion tenge ($260 million) bailout in 2017 credit-rating analysts believed that this would be a one-off. It was assumed there would be no further assistance because the bank was not considered systemically important to the national economy.

However, in February it was confirmed that ATF would receive a further $80 million in aid from the National Bank of Kazakhstan. In addition, the bank has received large cash deposits of approximately $350 million from Samruk-Kazyna, the country’s sovereign wealth fund.

Samruk’s rules reportedly prevent it depositing cash with weak banks and ATF’s credit rating is among the lowest and is considered junk status.

Speculation has mounted that Galimzhan Yessenov, who bought ATF for $500 million in 2013, has benefited from his political connections in Kazakhstan. His father-in-law is Akhmetzhan Yessimov, chairman of Samruk-Kazyna and a close ally of former President Nursultan Nazarbayev.

The aid given to ATF Bank over the past few years has thrown a spotlight on Yessenov and his growing business empire. Yessenov is only 38 years old but is already one of Kazakhstan’s richest people with a fortune estimated at more than $500 million, according to Forbes.

But Yessenov does not come from a rich family. His grandfather was Shakhmardan Yessenov, a noted scientist and geologist during the Soviet era, and the family was not regarded as wealthy.

Yessenov’s fortunes appear to have improved around 2007, when he married the daughter of Akhmetzhan Yessimov, who was minister of agriculture at the time.

In October 2007, a Kazakh agribusiness called Kazfosfat was acquired by a UK company called Kasphosphate for $120 million.

The buyers were two companies located in the secretive offshore jurisdiction of the British Virgin Islands (BVI). They were called Beronia Enterprises and Balliana Capital. After the UK introduced new corporate disclosure rules in 2016, it was confirmed that the beneficial owner of Beronia and Balliana was Galimzhan Yessenov.

He had acquired Kasphosphate with unsecured loans of $140 million from two more BVI companies: Kennon Finance and Drewes Management. Corporate records show that the lender and the buyer were related parties, implying that someone close to Yessenov gave the 25-year old an unsecured loan for $140 million to acquire Kasphosphate.

Speculation has focused on whether the money came from the father-in-law Yessimov. If so, this raises further questions about how a career politician like Yessimov had such large sums of money at his disposal.

Similar questions have been raised over the purchase of ATF in 2013, when Yessenov was 31. The acquisition price quoted by the media appears vastly more money than the young businessman had access to.

Around the time of Yessenov’s marriage, he started to obtain other assets including a large stake in Delta Bank. He was chairman of the board at Delta from 2007 - less than five years after leaving university.

The generosity shown to ATF by state institutions and Yessenov’s rapid rise into the ranks of Kazakhstan’s elite suggest that the young businessman has friends in high places. But it also raises questions about the origins of his wealth and whether he has benefited from the proceeds of corruption.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes

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