Kairat Boranbayev Returned Oil Field to State

Kairat Boranbayev has recently decided to transfer the Severny Karazhanbas oil field to the state. The estimated value of the company is 35.4 billion tenge. Orda.kz looked into the matter.

On September 14, Kairat Boranbayev voluntarily returned assets worth 90 billion tenge to the state. This included an oil field, a gas distribution company, a service company, hotel and shopping and entertainment complexes, a network of fitness centers and office space. At the same time, no one has disclosed their names.

35 Billion Tenge

JSC Phystech II is a Kazakhstani company engaged in the exploration, production and sale of hydrocarbons. The company produces oil at the North Karazhanbas field in the Mangystau region. Until October 3, the shares of the organization, according to the Kazakhstan Stock Exchange, were owned by KazTurboRemont Holding Company LLP, previously owned by Kairat Boranbayev and his business partner, Askhat Userov. 

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KazStroyProekt-A LLP (99.28%) and Karat Boranbayev (0.72%) became the new shareholders. They did not own the asset for long. On October 4, they held a meeting with the board of directors, where they decided to give the state 100% of Phystech II's shares. The enterprise was transferred to the State Property and Privatization Committee. 

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Damage to The State, Fines and Oil

The main asset of the company is "Karazhanbas Severny". In 2017, the State Commission on Reserves approved a new volume for the south-western section of the field in the amount of 2.6 million tons of oil and 13.21 million cubic meters of gas. Two years later, the same state commission recalculated the geological and recoverable reserves for the northeastern section. At the end of July 2020, the JSC issued a loan in the amount of 217 thousand euros for drilling wells. 

The company's own capital is 8 billion tenge. Its total assets are 25 billion tenge. At the same time, total liabilities decreased from 41.9 billion tenge to 17.7 billion tenge in three months. And net profit, on the contrary, increased from a negative balance to 21.9 billion tenge.

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Last year, the company's employees went on strike demanding higher wages. People said that the management  disrespected them and exerted pressure, demanding to resign.

In October of this year, the Mangystau region's Prosecutor's office investigated JSC Phystech II. The company's employees complained about the company. The supervisory authority found a number of violations: labor rights, environmental legislation and contractual obligations to the state. JSC reimbursed the damage to the government in 1.2 billion tenge, and also paid administrative fines (70 million tenge).

Background

According to the investigation, officials of KazTransGas deliberately purchased Russian gas through the controlled intermediary company Aziyagazchunja LLP at an inflated price and then embezzled the money received. 

On March 31 in Saryarkinsky court No.2, the founders of Aziyagazchunja LLP, Kairat Boranbayev and Roman Nakhanov, as well as the former deputy chairman of the Board of Qazaq Gaz JSC, Tayyr Zhanuzak, received their initial sentence. 

Kairat Boranbayev and Roman Nakhanov were sentenced to eight years in prison with confiscation of property and also deprived of the right to hold positions in the civil service for life. Tayyr Zhanuzak was also sentenced to eight years in prison with a life ban on the right to hold positions in the civil service.

On July 2, due to the absence of the original protocol, where the cost of buying Russian gas is indicated,  Astana's judicial board for criminal cases overturned Boranbayev's sentence. On September 15, the businessman received his official sentence. The Panel of Judges approved a procedural agreement, under the terms of which all the defendants plead guilty, compensate for damages, and receive a six-year sentence.

Original Author: Maria Gorbokonenko

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.