Is Nazarbayev University Trying to Cut Ties with Shigeo Katsu?

Yesterday, anonymous Telegram channels began to spread information about Shigeo Katsu's departure from Nazarbayev University. Orda found out that an extraordinary meeting of Nazarbayev University's Board of Trustees was held on May 17. The decision to relieve the president of his duties at the University was reportedly announced at it.

Orda journalists have repeatedly addressed issues related to Mr Katsu's various activities. Yesterday afternoon, our source confirmed that the meeting was held, the decision was announced, and Katsu was given exactly a month to pass on his responsibilities. Until then speaking about anything is prohibited.

It can be assumed that the last remark is related to Nazarbayev University's hasty statement released today. They claimed the information about Katsu's departure is untrue.

"The University administration informs that Shigeo Katsu was and remains the first and current president of Nazarbayev University and plays a key role in ensuring sustainable development, institutional well-being and effective management at the university.

President Katsu continues to fulfill his duties as the first head on a daily basis, which today are connected, among other things, with the preparation of Nazarbayev University for the graduation of the 9th cohort of students. The information about his resignation has no grounds, does not correspond to reality and is aimed at destabilizing the activities and educational process of the university,"

the statement says.

But it is this absolute secrecy and the contradictions that draw attention to the history of the top manager even more. The peak of his career occurred during his time in Kazakhstan.

For the most part, foreigners come to our country for temporary work and hardly associate themselves with the reality that is life in Kazakhstan. Shigeo Katsu, however, belongs to the few who were able not only to settle down but also to join the establishment and acquire a variety of posts and positions.

His history – from laying the foundation of the ecosystem of Nazarbayev University (NU) and Nazarbayev Intellectual Schools (NIS) to his eye-boggling income at Jusan Bank – is an important subject matter for both Kazakhstanis who are building New Kazakhstan and foreigners who want to participate in this difficult process.

First Steps

Before ending up in Kazakhstan, Mr Katsu worked at the World Bank. He spent 30 years there and rose to Vice President for Europe and Central Asia.

In 2009, Katsu left the World Bank, and in December 2010 became Nazarbayev University's rector at the invitation of Karim Massimov, the author and ideologist of the NU+NIS project. Massimov was the Prime Minister of Kazakhstan at that time.

Meanwhile, what seems to be hidden plot was simultaneously concocted for the university. On January 19, 2011, the law "On the status of "Nazarbayev University", "Nazarbayev Intellectual Schools" and "Nazarbayev Foundation" was adopted. And on June 15 of the same year, the university received the status of an autonomous educational organization. Thus, Nazarbayev University with Shigeo Katsu as its head no longer answered to the Ministry of Education and Science. Although this meant that the university lost access to state budget funds, the creation of alternative sources of funding ("Nazarbayev Fund") came into play.

Swift Victories

Starting in 2010, Nazarbayev University, thanks to teachers from abroad, the persistently formed image of "educators of the future elite", and exorbitant price tags (amounts of 12 thousand pounds sterling or 18.8 thousand dollars for 2011 were indicated in press releases - Ed.) began to rapidly gain popularity. Those who wanted a better future for their children considered the university, if not a full-fledged replacement for the Bolashak program, then a very convenient alternative in terms of money and logistics. The quality of education also made it a very worthy alternative.

The competition among applicants for the 2011-2012 academic year amounted to more than 8 people per place and among teachers – more than 10 people per place. They would only change slightly:

• 2017-2018 – 7-8 people per place
• 2019-2020 - 6 people per place.

The university, which does not comply with the official education system, has ignored, among other things, the SNT (Standardized National Testing - Ed.). Passing it does not affect admission or non-admission, as the University's own test is used to help determine who to accept.

The University's academic growth goes in tandem with an influx of students. Its strategic partners are the University of Cambridge, the Colorado School of Mining, Duke University and other major world universities. In 2013, the University opened the Executive MBA program, which is popular to this day. In 2014, a pilot Technopark was opened. And in September 2015, a medical school had been opened. In December 2015, NU received the status of a research university.

This all came to be thanks to Mr Katsu's undeniable managerial talent, even if he had no prior experience in managing educational institutions. But he did have the proper tools. Indeed, he admitted in an interview that he was provided with all the resources to achieve success. It's no secret that Nazarbayev University was one of Nursultan Nazarbayev's favorite projects. Money, land, and administrative resources were no issue. Astana residents joke that "Massimov's bunker" is located under the site between the main building of NU and Uly Dala Avenue.

Old Kazakhstan's Peculiarities

Nazarbayev University and Nazarbayev Intellectual Schools have indeed utilized the provided opportunities in the shortest possible time. They crank out high-level specialists in demand both in Kazakhstan and abroad. This runs concurrently with their scientific and academic base with a distinct prospect for regional intellectual expansion.

However, a team of NU ideologists led by Karim Massimov saw their goal not only and not so much in educating future generations, but rather in establishing procedures under which no state authority, including the budgetary ones, was able to turn the university away.

In 2015, on the basis of subsidiaries of JSC "National Medical Holding", by the decision of Nazarbayev University's Board of Trustees, a Corporate Fund (the favorite form of ownership for the capital's bigwigs) "University Medical Center" was created.

The Board of Trustees at that time could do everything or almost everything, as it was headed by Nursultan Nazarbayev. But there were no real legal grounds for the university to take over the state medical holding. It was not a new institution and combined a number of large assets. Although the PR materials indicate that "the Foundation's centers are the clinical base for the NU School of Medicine, where future doctors will receive knowledge and reinforce them with practical skills," it is unclear what prevented NU School of Medicine's students from training via their own University Health Center or interning in the capital's clinics without such complex structural solutions covering virtually the entire medical cluster of the capital.

Nazarbayev University's creation of PIONEER CAPITAL INVEST LLP in 2017, however, piques interest more than anything. One of its founders is the Nazarbayev Foundation, while its beneficiaries are Nazarbayev University and Nazarbayev Intellectual Schools.

RMB: Pioneer Capital Invest LLP once belonged to First Heartland Securities, which in turn owned Jusan Bank and other assets. Orda has repeatedly written about this.

Meanwhile, the Prosecutor General's Office has requested to deem the deal between Pioneer Capital Invest LLP and its subsidiary, Jusan Technologies Ltd., as illegal. The deal's aim was to transfer control and withdraw assets of First Heartland Jusan Bank JSC, as well as related organizations to foreign jurisdictions.

The plot mentioned above indeed worked out. "Nazarbayev Foundation", while being positioned as an endowment fund created in accordance with the best international practices to finance Nazarbayev University and Nazarbayev Intellectual Schools appeared to the world already as a tool for the hidden accumulation of assets and their withdrawal abroad.

The irony is that the Nazarbayev Foundation is reluctant in dealing with the immediate tasks of financing the university and schools. Aslan Sarinzhipov said in January 2022 that the Foundation allocates at least $10 million annually to support the academic institutions' research activities. But the budget financing of Nazarbayev University alone, according to Shigeo Katsu, amounted to about 60 billion KZT per year, that is, about 12 times more than transfers from the Nazarbayev Fund.

The state came to the rescue. And the Nazarbayev Foundation fed its creators and functionaries, including Katsu.

King Midas

The role and significance of Shigeo Katsu described are not obvious at first glance and are difficult to overestimate. On February 7, 2019, he became chairman of the board of directors of Tsesnabank. At that time, the bank had almost been completely absorbed by the Jusan group. Random people are not appointed to such positions at such a critical moment.

Katsu's positions remain incredibly stable to this day and are also reflected in the remuneration he receives through Jusan Bank. Orda wrote about this in detail in the analysis of the bank's annual report for 2022.

RMB: This concerns multibillion–dollar wage increases and a possible package of shares in Jusan Bank, which Mr Katsu may have received for his managerial merits (The bank denies information that Shigeo Katsu owns shares - Ed.).

But that's not all.

According to the information received by our Telegram bot @Ordakazakhstan_bot, in March 2022, that is, two months after the arrest of Karim Massimov, at the initiative of Mr. Katsu, Jusan Bank sent a claim to stakeholder Galimzhan Yesenov. It was for reimbursement of ATF Bank's tax obligations (at that time it had been absorbed for a year and a half by Jusan Bank) amounting to more than 5.5 billion KZT in order to "correct" (in other words, to reduce) his share. This incident, as the source notes, served as a reason for Yesenov to prepare a lawsuit to the London International Arbitration Court in order to protect his interests.

This is the story of Shigeo Katsu, a man, who in 13 years turned from Prometheus, the bearer of the light of knowledge to Kazakhstan's youth, into a modern copy of King Midas.

However, there is another important fact that should not be overlooked. If Mr Katsu trully parts ways with Nazarbayev University in a month, it will not negate the fact that he remains among the directors of the American non-profit foundation New Generation Foundation (removed from the list, but is now there).

The Fund, through Jysan Holding, owns the entire structure of the Jusan Group, which also includes Nazarbayev University and Nazarbayev Intellectual Schools. This is all thanks to the "gift" from Pioneer Capital Invest, which gave its share to the British Jusan Technologies. In other words, Shigeo Katsu will manage educational institutions bearing the surname of the ex-president of Kazakhstan, while American and British companies will own the entire structure.

RMB: The fight for assets worth $1.5 billion is ongoing. The trial is taking place in the Bostandyk District Court of Almaty, while in Nevada, the American Jysan Holding and the British Jusan Technologies filed a counterclaim. They want to challenge the claims of the Government of Kazakhstan to these very assets. The main argument is the possible lack of future financial support, which will negatively affect the students of NIS and NU.

Orda.kz will continue to monitor developments around the Jusan structure.

Original Author: Orda.kz

DISCLAIMER: This is a translated piece. The text has been modified, the content is the same. Please refer to the original article in Russian for accuracy.