How QazaqGaz Turned Gas Bills Into Villas in Dubai

The national company QazaqGaz, which constantly raises the issue of unprofitable internal tariffs, spent billions of tenge on printing out regular receipts for gas payments. In the long-term plan of subsidiaries, eight times more money is allocated for this than for developing and repairing gas networks. The Orda investigation department has uncovered another scheme of Kairat Sharipbayev, Dariga Nazarbayeva's current spouse. It may still be generating income for him.

We previously reported how billions of tenge were stolen in the national company QazaqGaz via office rent. We drew attention to one, but far from the only, method of siphoning finances, which were used by Kairat Sharipbayev, who previously headed the gas industry.

After Qantar, an internal audit of the company revealed 40 firms affiliated with the husband of Elbasy's eldest daughter. QazaqGaz and its subsidiaries purchased most goods, works, and services from them. As it turned out, developing costs for issuing a receipt for natural gas payment turned into a costly ordeal.

 A subsidiary of QazaqGaz — JSC KazTransGas Aimaq, currently QazaqGaz Aimaq, only on billing (calculation of services for each client, including printing of receipts) utilized two-thirds of the budgets of local branches of the company. They did this through regional private LLPs "RCCU" (settlement center for public services), such as "RCCU-Shymkent," LLP "RCCU-Atyrau," LLP "RCCU-Taldykorgan," LLP "RCCU-Oral" and so on.

The lion's share of the amounts included in the gas tariff went to private "RCCU" firms.

To determine how much it costs to issue receipts for natural gas consumed, we analyzed the electronic procurement portal of JSC NWF Samruk-Kazyna. One primary function of the site is to ensure the transparency of purchases by national companies. Everything seems to be designed to hide important information. We would like to draw the attention of the management of Samruk-Kazyna and the Prosecutor General's Office to the fact that the site's functionality does not provide any data regarding individual organizations.

Based on the annual and long-term plans for the procurement of goods, works, and services for 2018-2024 available on the website, we found the expenses planned by QazaqGaz Aimaq for billing services. A long-term plan is a company document that allows one to plan expenses for three to five years in advance and conduct the procedure for selecting a service provider once for the entire period.

In practice, the tender documentation terms specify the requirements only the required supplier meets. Such a plan allows the "lucky" tender winner to utilize the budget for years to come.

The national company's billing expenses, similar to office rental costs, grew exponentially and did not correspond to the cost of providing services and the growth of the gas company's consumers. For example, according to the long-term procurement plan for 2018-2020, the West Kazakhstan branch of QazaqGaz Aimaq planned to spend 174 million tenge on billing services in the second half of 2018. In 2019, these costs amounted to 547.6 million tenge, and in 2020, 512.2 million tenge, almost twice the 2018 budget.

The company's long-term procurement plan for 2021-2025 catches one's eye even more so. 

To understand how much or little this is, we compared the costs of billing services with the financial investments in the construction and modernization of gas networks provided by the company in the same plan. In theory, this particular expense item should be fundamental since the development of gas networks and gas transportation is what the company should do. 

According to the plan, these expenses amounted to only 5.045 billion tenge, eight times less than the costs of issuing receipts. At the same time, the company did not plan to carry out work in 2023-2025. 

According to QazaqGaz's annual report, Aimaq supplied Kazakhstanis with four billion 160 million cubic meters of natural gas in 2021. The gas company's website indicates that the tariff for natural gas for the population of the West Kazakhstan region in 2021 was 16.9 tenge per cubic meter.

That is, having paid 6.3 billion tenge in 2021 to issue receipts to the population, the company spent about 10% of the total money collected from consumers. 

All company branches received billing services from private enterprises TOO "RCCU," whose income in connection with long-term purchases sharply increased threefold or even fivefold. This can be seen in the example of a sudden jump in the tax liabilities of TOO "RCCU-Oral" randomly taken by us. In 2018, their tax payments amounted to 30 million tenge. Meanwhile, in 2019, they were already about 160 million tenge; in 2021, they were 210 million tenge. 

We decided to find out more about these RCCU companies. As it turned out, these organizations were created in each regional center during Kairat Sharipbayev's gas industry leadership. Among the first stakeholders (founders) was the company Inform System. It belonged to Sharipbayev's first wife, Zhanar Seidvalieva. 

In the Dubai real estate register, she is listed as the owner of an apartment worth 1.5 billion tenge in the building THE RESIDENCE SOUTH on the island of Palm Jumeirah. Kairat Sharipbayev's daughter, Korlan Sharipbaeva, also purchased an apartment there. 

 
The wife of Sharipbaev’s close confidant, Ibulla Serda, who was found guilty of embezzlement while purchasing gas and put on the wanted list, owns a luxury house in the FAIRMONT RESIDENCES residential complex in Dubai.

Studying the companies in publicly available resources, we unexpectedly saw that two weeks before the January events, LLC “Inform System” decided to abandon a profitable income source.

All company shares in a "RCCU" were registered to LLP "Qazaq Billing." The company has no direct connection with Sharipbayev but is apparently managed by people who are by no means strangers. All this looks like an attempt to "cover up tracks and cash out." Was attention paid to this during Qantar's investigation?

  
According to the annual report posted by QazaqGaz Aimaq on the Kazakhstan Stock Exchange, Taiyr Zhanuzak occupied the Chair of the Board of Directors during the embezzlement. 

Zhanuzak was sentenced to five years in the same case in which Kairat Boranbayev was involved. However, this trial concerned only financial asset embezzlement in QazaqGaz, not in subsidiaries. Another member of the board of directors of KazTransGas Aimaq, Rustam Suleimanov, also seems to have evaded the scope of the investigation. According to our sources, he earned the title of Sharipbayev's ally and confidant over many years of faithful service. 

It is unknown whether withdrawing money from the national company under this scheme continues. The Samruk-Kazyna procurement website does not provide information about whether the current QazaqGaz management has reduced the subsidiary's billing costs or whether the supplier of these services has changed since 2022, as was done with renting an office building. We sent corresponding questions to QazaqGaz Aimaq. 

If such changes have not occurred, Dariga Nazarbayeva and former top managers of the national company's luxurious life abroad are still being paid for from the pockets of gas consumers with the passive participation of the current management of QazaqGaz.

At the same time, if we believe the analysts' data QazaqGaz refers to, the company loses 11 tenge from selling each cubic meter of gas on the domestic market. The national company claims that it supplies gas to Kazakhstanis at unprofitable prices and intends to raise tariffs again. 

But if the QazaqGaz management had not ignored the crimes of the previous leadership but insisted on the return of the stolen money spent on renting office buildings and billing services, not to mention other expenses, the position of the national company could have been significantly improved.

The fact that the current gas industry leadership is not interested in investigating the affairs of Sharipbayev’s team is evidenced by the fact that the loyal assistant of Dariga Nazarbayeva’s husband, the former general director of KazTransGas Aimak Manas Tasybayev, holds the position of general director of the most profitable subsidiary of QazaqGaz, Intergas Central Asia JSC.

After Qantar, QazaGaz Chair of the Board Sanzhar Zharkeshov reported on financial violations in the gas sector amounting to almost a trillion tenge at a government hour in the Majilis. 

More than two years have passed, but no investigations have been announced publicly apart from the high-profile case involving Kairat Boranbayev. In the main criminal case, the businessman compensated for 14.5 billion tenge in damages and voluntarily returned about 120 billion tenge to the state. What happened to the rest of the stolen money?

Orda.kz will continue to follow developments.

Original Author: Editorial

The original article was posted on 31/10/24. Please refer to it for accuracy. This is a translated piece.