Dear “relatives” of Asylzhan Mamytbekov

How many “daughters” and “granddaughters” have “KazAgro”, the favorite child of the ex-Minister of Agriculture of the Republic of Kazakhstan Asylzhan Mamytbekov? This question was asked by the auditors of the Accounts Committee when in the first half of this year they tried to find the reasons for the astronomical losses of the holding – 120 billion tenge for both last years.

 It turned out that since the establishment, KazAgro NMH JSC has included seven subsidiaries in which the holding owns 100% of the shares: Food Contract Corporation Corporation (Food Corporation) JSC, KazAgroFinance JSC (KAF); Agrarian Credit Corporation JSC (“ACC”); JSC “Fund for Financial Support of Agriculture” (“FFPSH”); JSC “KazAgroProduct” (“KAP”); JSC “KazAgroGarant” (“KAG”);  “Kazagromarketing”.

 Moreover, these structures, in turn, are the founders of a whole series of companies – already “granddaughters” for KazAgro, or have an extensive network of representative offices.  And all this voracious horde appetizingly sucks state (budget) and people’s (UAPF and GFSS) money.

 So, the leader in terms of the number of subsidiaries was Food Corporation, an expert of the news agency notes.  As of January 1, 2019, she was the founder of the following legal entities:

1) JSC “Ak Bidai-Terminal” (share of 75.1026%).  In turn, AB Bidai-Terminal JSC is a participant in Amirabad Green Terminal Kish LLC (Iran) (50% share) and Baku Grain Terminal LLC (Azerbaijan) (50% share);

 2) LLP “Astyk Koymalary” (100% share);

 3) LLP “Expert Agricultural Company” (100% share).  In turn, Expert Agricultural Company LLP is a founder in NurAgro Agrofirm LLP and Astana Agro Firm Agrofirm LLP.

 In addition, the structure of the Food Corporation includes a central office, four representative offices in the regions (Akmola, Kostanai, East Kazakhstan, North Kazakhstan) and one overseas representative office in the People’s Republic of China.

What is especially interesting in this information is the structure of grain shipping.  The topic with JSC “Ak Bidai-Terminal” has already put on edge (and bumps on the forehead) to all grain exporters – in season there are constant lines for shipping grain by sea.  The terminal has long required expansion, but it turns out, instead, KazAgro managed to invest in a certain terminal in Iran – Amirabad Green Terminal Kish LLC.  Prior to the release of the audit report, few knew about its existence in principle, and for many traders this information was a discovery.  And it has two sides: firstly, why the capabilities of this terminal, once it exists, are not available to Kazakhstan traders?  One gets the feeling that someone is simply developing their personal business at the expense of the state funds of the KazAgro holding (as Mamytbekov had been a minister more than once — remember the Meat Union of Kazakhstan).  Secondly, Iran is now under US sanctions, and doing business in this country must be very careful.  Any mistake – and secondary sanctions will be imposed on companies or banks of Kazakhstan itself, and even the whole country.  In addition, the situation in the Islamic Republic is growing tense from hour to hour, and any object, especially in a strategically important port, could be damaged in the event of hostilities – just be destroyed.  And in the end – new losses of KazAgro, which the state will have to cover from the pockets of ordinary citizens.

But back to the “bloated” greed “daughters” holding.

Structure of JSC “KAF” JSC and “ACC” are the same – they include the Central office and branches in 14 regions. In addition, “ACC” has two city affiliate of Nur-Sultan and Almaty. Plus, is the co-founder of one of the “daughter” — LLP “Enbek-Kredit (share of 6.75%).

Interestingly, the “ACC” could very well accomplish the task “CAF” on the lease – this type of activity is indicated in its founding documents. So, could two times to reduce the cost of maintaining the voracious structures. But since “KazAgro” budget funds are not counted and not saved, no such and never occurred. And audit it was found that under the eight main activities of JSC “ACC”, 2 kinds (implementation of leasing activities and holding activities) no activities were carried out.

The structure of “ffpskh” is also very broad. It includes as much as 23 “daughter” — LLP “MCO “Zhiger Yesil” (share of 41.6%), 22 micro-credit institutions (share of 49%). Plus, 14 branches in the provinces.

The structure of the “CAG” also involves the maintenance of representative offices in 14 regional centers.

In relation to these “regional cells” the question is unclear: while always referred to the need to maximize digitization, implementation of electronic circulation of documents and information to the minimum contacts of borrower with the employees of credit organizations, what is the point to keep the branches with live people? Why not found the remote services application, which would handle all the messages sent to the Central office by abandoning the spending of huge funds on offices in the regions? The answer is obvious, and it has announced the President of Kazakhstan Kassym-Jomart Tokayev at the enlarged meeting of the government holding was managed by unprofessional, did not save money, with the result that objectives are not achieved, tasks are not performed, and the debts grew by leaps and bounds.

Not surprisingly – as the Creator of all this quasi-monster, Mamytbekov Asylzhan needed a structure on the “scroll” budget dengue, not an effective mechanism of support and development of agribusiness.

And how are you feeling “daughter” of the holding “KazAgro” when they push away from the public trough? Very, very unflattering. This is confirmed by the example of JSC “Kazagroproduct” (“CAP”), which was created for the development of the domestic market of livestock products and growth of its export potential.

So, the audit found that 12 of the envisaged main activities of JSC “CAP”, for 9 types didn’t work at all!

That is, do NOT engage in any infrastructure development of exports of agricultural animals; no purchasing operations and price interventions of the raw materials and products of animal origin; neither the import of raw materials and products of animal origin; or the acquisition of specialized vehicles, technological equipment for processing and storage of raw materials and products of animal origin; any provision in the lease and/or lease of equipment for processing and storage of raw materials and products of animal origin; neither the investment activities in animal husbandry; or participation in joint activities with the organization of production, procurement, processing and sales of raw materials, products of animal origin; no participation in the formation and promotion of Kazakhstan brand raw materials and products of animal origin;

What do you think was the reason for such a failure? Their auditors found:

“Causes of failure of the main activities is the transmission of JSC “CAP” in a competitive environment as a priority, according to the decree of the Government dated 30 December 2015 №1141 “On some issues of privatization for 2016-2020”, report says.

The same thing will happen with all the holding “KazAgro” as soon as the state will cease to pour into it hundreds of billions of tenge: created by Mamytbekov the structure will collapse. And burying all of the country’s agriculture.

Myrzabek Smagulov

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