“KazAgro” took hostage 77 thousand peasants

The reaction to criticism of the President of Kazakhstan, Kassym-Zhomart Tokaev, followed from KazAgro NMH.  Yerbol Karashukeyev, Chairman of the Board of the holding, spoke about three primary tasks that he intends to solve in order to prevent default.  Recall that auditors saw signs of an impending collapse already this year.


According to the holding’s press service, the International Auditing Company KiPiEmGi (KPMG) completed a comprehensive independent assessment of the financial condition and activities of JSC “NMH KazAgro”.  By the way, the audit was initiated by the new board, and its results will be presented to the sole shareholder of the holding (100% of KazAgro belongs to the state).

 At the same time, the main conclusion that the board has already made from the results of the audit is disappointing: the reason for the financial failure (losses of almost 400 billion tenge for the entire existence) is called … turbulence in the financial market of Kazakhstan in the period 2013-2017, associated with devaluation of tenge and default  a number of banks lending to the country’s agro-industrial complex.  Like, the holding was not ready for negative events, having borrowed a lot in foreign markets in dollars and euros.  And as a result, suffered significant losses.

 The conclusion seems to be correct, but very superficial.  If you look a little deeper, it is obvious that the collapse of “KazAgro” is explained by the initial flaw of the entire structure, which was created by Asylzhan Mamytbekov, and then mercilessly exploited for more than 10 years to the benefit of the pockets of a limited circle of people.  And in no way for the benefit of the development of the agro-industrial complex of the Republic of Kazakhstan (despite the fact that the mission was designated by KazAgro), KazakhZerno.kz correspondent reports.

 That is, the holding came to a simple scheme – to take somewhere cheap money (the state budget, the pockets of ordinary Kazakhstanis (UAPF, GFSS) or a foreign loan) and give the peasants at a furious interest for profit, but not for the sake of giving impetus to the country’s agriculture.


“The head of state quite rightly voiced criticism of“ KazAgro ”, focusing on the need for its decisive reform,” Yerbol Karashukeyev admits in a press release.  And it indicates three areas in which urgent changes need to be moved to solve the problem of unprofitability and low efficiency.

 However, the measures proposed by him are another “cosmetic repair” that does not affect the flawed system laid down in the foundation of the holding.  That is, the new chairman of the board proposes, firstly, “the development and adoption of urgent measures to stabilize the financial position of the holding.”  As part of this work, the holding at the end of May of this year already paid off all its foreign currency debt.  Fluctuations in the tenge will no longer result in losses.

 What is especially surprising: it turns out that a draft financial development model for the next 15 years (!) Has been developed, which involves the gradual withdrawal of the holding from the current situation.

Rate audacity: the holding company has lost any trust of the peasants and the authorities of the country, but its leadership plans to continue at least 15 years (!) continue to work exclusively on actual enrichment, obviously, finding resources to maintain its viability from the state Treasury and the pension savings of citizens of the country!

The second sentence has Karasaeva: “optimization of the holding”. It offers the elimination of a number of subsidiaries, reducing their number from 7 to 3. What do you mean? It is obvious that to write “in service” management of the holding plans three its the largest “daughters”: agrarian credit Corporation, Fund for financial support of agriculture and “KazAgroFinance”. This is the most profitable structures that take no chances and just “scroll” through the budget: the ACC provides short-term loans to farmers for field work, FFSA is the operator of a number of government programs support the village, “KazAgroFinance” JSC produces in leasing machinery and equipment. Chicken that lays the Golden eggs at the expense of the peasants!

Thirdly, Erbol of Karashukeyev offers further automation of all processes: “70% of our borrowers – farmers who take up to 4 million tenge for their needs. We set ourselves the task to reduce the time for consideration of their loan applications from the current 30 days to 3 hours! The main task — not to force our borrowers to run on instances of different references. The farmer must apply to the structure of “KazAgro” only with ID card and get approved for credit for 3 hours”,  stated in a press release.

Like, good suggestion. But as we have already mentioned, the system Qoldau on the basis of which is process automation, managed to earn a very bad reputation among farmers because of numerous flaws. So the promise of automation of processes and simplification of procedures – no more than beautiful words.

Absolute futility

The holding’s message also contains information that the company’s staff has already been reduced by 20% and will lose another 25% in the near future.  Let’s look at the question from the other side: the management plans to leave 55% of employees (more than 1000 people) who are not beneficial to the agricultural sector of the Republic of Kazakhstan, still to sit in their posts and receive huge salaries.  At the expense of the peasants of the country.

 Does anyone want to argue about the benefits?  So, the accumulated loss of the holding, confirmed by the audit company Ernst & Young, at the beginning of 2019 amounted to 399.1 billion tenge!

 At the same time, the total amount of financing of the agricultural sector of Kazakhstan by subsidiaries of KahAgro in 2018 amounted to 400 billion tenge!

 These two identical figures characterize the absolute futility of the KazAgro holding.

 That is, if there weren’t a holding in the world, it would be possible to simply distribute the same 400 billion tenge in the form of irrevocable grants to the country’s farmers.  Thus, the farmers would receive strong support without any overhead costs for the maintenance of the staff of intermediaries.  And the money would have been targeted in the agricultural sector of the Republic of Kazakhstan, and would not have settled in troubled banks or on the accounts of those foreign businessmen from whom KazAgro borrowed $ 1 billion and 600 million euros.

Monster hostages

However, the holding’s leadership does not want to acknowledge this obvious futility and continues to link the well-being of the peasants with the existence of an inefficient clumsy construction created on the mountain for agriculture, not without the help of the ever-memorable Asylzhan Mamytbekov.

 “When we talk about the fate of“ KazAgro ”, it must be remembered that the subsidiaries of the holding currently have more than 77 thousand borrowers – agricultural enterprises, farms and farms that use affordable loans from “KazAgro”.  And any decisions that will be made in the near future should, first of all, not worsen their situation”, warns Erbol Karashukeyev.

 Let’s add on our own: decisions should not “not worsen”, but improve the situation of the country’s peasants.  That is why the holding was created by order of Elbasy in 2006!  But somehow, now 77 thousand peasants have simply become hostages of this quasi-state monster.  From this captivity they need to be rescued.  And it is advisable until the holding company, following the banks it credited in the past, defaults. 

Myrzabek Smagulov

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