KTZ Recovers ₸96 Million from Supplier Linked to Former Prosecutor General’s Brother

KTZ–Passenger Locomotives has recovered nearly 96 million tenge through the courts after a supplier failed to fulfill its contractual obligations and refused to return the funds. Orda.kz examined the court documents.

The supplier in question is High Industrial Lubricants & Liquids Corporation (HILL), founded by Dulat Kozhamzharov — a well-known businessman in the petrochemical industry and the brother of Kairat Kozhamzharov, the former head of the Financial Police and Prosecutor General.

His current whereabouts remain unknown.

Background

In December 2024, KTZ–Passenger Locomotives signed two contracts with HILL for the supply of SAE-40 diesel oil valued at over 500 million tenge. The oil was intended for locomotives and had to meet the manufacturer’s technical standards.

KTZ–Passenger Locomotives paid 151 million tenge in advance, but by mid-2025, the supplier had fulfilled only about 40 percent of the order. The remaining 45.7 million tenge was never returned.

HILL, established in 1998, initially operated as a lubricants trader and later launched a production plant in Shymkent in 2010, which still operates today. When the railway company demanded a refund, the supplier claimed that “government inspections and legal proceedings” were disrupting its work and proposed terminating the contract.

KTZ refused and filed a lawsuit to recover the unpaid advance and penalties.

The Astana court ruled entirely in favor of KTZ, ordering HILL to pay 45.7 million tenge in advance payments, 50.4 million tenge in fines, and almost 3 million tenge in state fees.

Why Did The Court Side with KTZ?

The court concluded that the supplier had breached the contract by failing to fulfill its obligations and unlawfully refusing performance, which is expressly prohibited under Kazakhstan's law.

Under the agreement, HILL was required to pay a 10 percent penalty of the total contract value for non-performance. The court found this condition binding and enforceable since it had been accepted by both parties.

The court dismissed HILL’s arguments about “rehabilitation procedures” and ongoing litigation, noting that the penalties were assessed before the company filed for rehabilitation — meaning those claims did not exempt it from liability.

KTZ was previously implicated in a 12 billion tenge procurement scandal involving a company reportedly linked to Dulat Kozhamzharov. That deal, too, concerned oils and lubricants for locomotives.

The latest ruling appears to be a continuation of the same story: multimillion-tenge contracts, problematic suppliers, and a state-owned company forced to recover its money through the courts.

Original Author: Alina Pak