Oil, Gas and Gasoline: How Talgat Boranbayev Became Kulibayev's Competitor

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The former NCE "Atameken" head, Ablay Myrzakhmetov, will be in pre-detention for two months on suspicion of fraud and incitement to bribery. Some media outlets published information that Myrzakhmetov wanted to receive money from Kairat Boranbayev's younger brother. Orda.kz found out whether Talgat Boranbayev could have offered $30 million (13.3 billion tenge) as a bribe with the help of his gas stations and oil products suppliers.

On May 10, the ex-head of NCE "Atameken" Ablay Myrzakhmetov was detained. According to the Anti-Corruption Service, he is suspected of fraud and inciting an entrepreneur to pay a bribe on a particularly large scale. The bribe was allegedly for assisting his relative to avoid criminal liability. On May 12, the specialized inter-district investigative court of Astana arrested him for two months.

How Kulibayev's Gas Business Became Talgat Boranbayev's Asset

Four companies have been registered under Kairat Boranbayev’s younger brother:

  • LLP "LPG Distribution"
  • "Orgsintez-Petroleum"
  • "Business Petroleum"
  • "PPP OIL Trade"

He had also owned AZS-Astana LLP until recently. This enterprise has already been liquidated. All Talgat Boranbayev's organizations are engaged in the oil and gas sector. They sell gas, gasoline and diesel fuel.

The LLP "LPG Distribution" sells gas under the brand name "Zigergaz". Talgat Boranbayev has been the company's stakeholder (founder) since November 28, 2021. It had previously belonged to Timur Kulibayev through Joint Technologies and Kairat Boranbayev through ALMALY Asset Management Company.

Screenshot Egov.kz

"LPG Distribution’s” main activities are the storage and sale of liquefied petroleum gas and construction and installation work on gasification. The company owned its own certified laboratory, a 24-hour emergency dispatch service, a tank farm of 10 tanks of 200 cubic meters each.

The company also operated a gas storage plant with a capacity of 24,000 tons per year. The company mainly supplies gas to Astana and the Akmola region. There are 17 round-the-clock gas filling stations (gas stations) in total. LPG Distribution also directly cooperates with manufacturers of petroleum products. Among them are JSC "SNPSAktobemunaigas", LLP "Tengizchevroil", LLP "PETROSUN" (previously owned by Timur Kulibayev – Ed.).

The LLP offers gasification services for private houses, settlements, apartment buildings and industrial facilities, sells gas equipment, etc. The company has signed about 200 government contracts, which are mainly related to the supply of gas for refueling cars and heating buildings.

The company's clients in 2022 included:

  • "Kazaeronavigation" – more than 29 million tenge
  • "Directorate of administrative buildings of the Presidential Administration and the Government of the Republic of Kazakhstan" of the Presidential Affairs Department – a total of 656,250 tenge
  • Department of Construction of Tselinograd district – 15 401 785.32 tenge
  • Astana-Ornek LLP – 56,473,217.9 tenge.

The company thereby makes a significant contribution to the state treasury thanks to such contracts.

Screenshot from kgd.gov.kz

Affiliation And Collusion

As of April 1, 2019, "LPG Distribution" has been on the list of affiliated entities of JSC "Subsidiary of Halyk Bank of Kazakhstan" Insurance Company "Halyk". At the same time, Talgat Boranbayev's company had not been listed in the register for January of the same year. The company is also affiliated with HALYK FINANCE, as is its director Rakhymzhan Begimbetov.

But this is not the only connection between Timur Kulibayev and Talgat Boranbayev. When 50% of the stake in LLP "Liquefied Petroleum Gas Storage Park" was put up for sale, LLP "LPG Distribution" was included in the list of the main gas distribution companies in Kazakhstan.

Screenshot of the report on the assessment of the 50% stake of ANPZ LLP in the authorized capital of the Liquefied Petroleum Gas Storage Park LLP as of December 31, 2019

According to the requirements and obligations that the companies of Nazarbayev's son-in-law presented when buying the 50% stake, they had to:

Forgo the implementation of activities for the sale of liquefied petroleum gas via LLP "LPG Distribution" and a storage park in the same region for two years.

In other words, they were not supposed to sell petroleum products on the same territory.

In 2015, LPG Distribution LLP made it on the list of enterprises that the Committee for Regulation of Natural Monopolies and Protection of Competition forced to reduce prices for liquefied petroleum gas. The company reduced retail sales in cylinders and liquefied capacitive gas by 17%. In 2018, the same agency conducted an investigation and revealed that AvtogazTrade LLP (now owned by Timur Kulibayev), KommersTRADE LLP and LPG Distribution LLP simultaneously increased the prices of LPG for refueling gas tanks in Astana. LPG Distribution was fined 140,758 tenge and saw its monopoly income (1,999,318 tenge) confiscated. 

Interesting Circumstances 

During the investigation, an Orda correspondent found two surprising details unrelated to Talgat Boranbayev. However, they concern the family of the first president, i.e. Timur Kulibayev and Aliya Nazarbayeva. The international company, PricewaterhouseCoopers Taxes and Advisory LLP prepared an audit report for Nursultan Nazarbayev's daughter and son–in-law.

The Association of Kazakhstan Automobile Business (AKAB) brought in the audit company in December 2015 to receive a master plan of the national system for car recycling. They calculated the cost of decommissioned vehicles (DVS). According to the auditor's conclusion, the cost of disposal exceeded the amount proposed by Aliya Nazarbayeva's company (123 000 tenge). A criminal case is being considered on overstating the cost of DVS recycling in Astana’s Baikonur district court No. 2.

PricewaterhouseCoopers Taxes and Advisory prepared an audit report for Timur Kulibayev on March 25, 2020, to evaluate the Liquefied Petroleum Gas Storage Park LLP before the sale. 50% of the company's stake cost 5.697 billion tenge.

Excerpt from the report of the audit company PricewaterhouseCoopers Tax and Advisory.

However, it was not possible to find the corresponding lot on the electronic trading site for an unknown reason.

History behind The Capital's Gas Stations

Talgat Boranbayev's oil business began with one company – AZS-Astana LLP. It was engaged in wholesale trade of a wide range of goods without any specification. They did, however, sell gasoline in Astana. It was implemented through a network of gas stations "Etalon auto" or M36.

In February 2019, Talgat Boranbayev became AZS-Astana’s stakeholder (founder).

AGZS in Astana, Saryarka district, 84 Tilendiev Avenue/Photo 2gis.kz

As of April 19, 2019, the gas station in Astana, located in the Saryarka district on 84 Tilendiev Avenue, belonged to the company. It was AZS-Astana that announced the holding of public hearings on the draft environmental impact assessment (EIA) on May 27, 2019. 

The LLP was reorganized on May 14. The gas station turned out to be on the balance sheet of another company of Boranbayev – Business Petroleum LLP. Along with it, other gas stations under the M36 brand were transferred to the company. Nine branches operate in the capital overall.

Talgat Boranbayev’s Demolition Registration of Gas Stations and Cafes Shut Down 

Business Petroleum faced problems in 2020. The company could not legally register the demolition of several buildings at its gas stations.

The organization demolished an old gas station built in 2008 and non-residential buildings built in 1975 and 1998 with a total area of 317 sq. m. The complex was located on the Alash highway, 23 in Astana. Business Petroleum would later build a new complex with a minimarket there. On May 20, 2020, the management of the LLP sent an application for registration, but it was rejected. As it turned out, Business Petroleum did not provide a document that would confirm that the demolished buildings could not be used. Yet on November 28, 2019, the "Government for Citizens" allowed the demolition.

A similar situation occurred with the gas station on Ondiris Street, 96. The company "Business Petroleum" had to demolish a cafe with a total area of 90.6 square meters. The Government for Citizens issued a demolition permit on February 14, 2020. But on May 27, 2020, the Department of Architecture, Urban Planning and Land Relations of the capital rejected the registration of the building’s demolition.

The management of the LLP filed a lawsuit in Astana’s Baykonyr district court in order to bring the ownership rights into line with the establishment of factual circumstances. On September 10, 2020, the court satisfied the claims and decided:

"To establish the fact of termination of the ownership of BUSINESS PETROLEUM LLP due to the demolition of a gas station built in 2008 with a total area of 24.2 m2; non-residential buildings built in 1975 and 1998 with a total area of 317.0 m2, located in Astana, Alash Highway, 23; cafe 90.6 m2, located in the residential area of Ondiris, Ondiris Street, 96."

The company has paid 3.2 billion tenge in taxes since 2018. BUSINESS PETROLEUM LLP contributed 74,831,212 tenge to the state treasury this year alone.

Screenshot from kgd.gov.kz

Despite the fact that the company's assets are in Astana and the Akmola region, the LLP is registered in Almaty on Zataevich Street, 29. Another organization of Talgat Boranbayev is there – Orgsintez-Petroleum LLP.

How Boranbayev's Company Imported Gasoline and Diesel Fuel from Russia

Like other enterprises of the younger brother of Dariga Nazarbayeva’s former in-law, Orgsintez-Petroleum is engaged in wholesale fuel trade. The company has been operating since July 2010. The organization has received about 100 licenses for:

  • The beginning or termination of activities as a taxpayer engaged in certain types of activities,
  • The beginning or termination of activities related to the wholesale supply of petroleum products.

Most of these licenses are no longer valid. The most profitable years were 2017 (3.3 billion tenge) and 2018 (2.9 billion tenge). Something has gone wrong since 2020, however. The amount of tax payments has sharply decreased. This year, Orgsintez-Petroleum paid only 2 million tenge to the budget.

Screenshot from kgd.gov.kz

In 2017, the company was convicted of violating Article 20 and Part 2 of Article 21 of the Law "On State Regulation of Production and Turnover of Certain Types of Petroleum Products". During the field audit, it turned out that in January and February Orgsintez-Petroleum LLP, when importing petroleum products (gasoline and diesel fuel produced by Gazprom Neftekhim Salavat LLC since 2010 – Ed.) from Russia to Kazakhstan, did not provide an accompanying invoice. The company transported 2,094,339 tons for a total amount of 267.8 million tenge.

According to the LLP’s representatives, there was no concealing of petroleum products turnover and tax evasion. The company reportedly presented the actual import volumes and paid the VAT and excise taxes on time and in full. The documents were presented in a timely manner, but technical errors were made during registration due to an employee’s inattention. At the same time, VAT was paid on the volume actually imported. But the auditor from the Medeu district State Revenue Department stood his ground: the LLP had provided accompanying invoices that didn’t reflect the entire volume of imported petroleum products.

On August 9, 2017, the specialized interdistrict Administrative Court of Almaty recognized Orgsintez-Petroleum LLP’s violations under part 1 of Article 281 of the Administrative Code of the Republic of Kazakhstan "Failure to submit or late submission of a declaration for petroleum products, as well as failure to submit or late submission of information necessary for monitoring." The companies received a fine of 500 MCI (1,134,500 tenge).

Another LLP

Talgat Boranbayev is also registered with PPS OIL TRADE LLP. The company is registered at Almaty at 69 Azerbayev Street, where the Danashym Physics and Mathematics School is located. AATD LLP, owned by Kairat Boranbayev, and Murat Boranbayev's Kazakh cool construction company are also registered at this address.

"PPS OIL TRADE’s” activities:

  • Wholesale of a wide range of goods without any specification
  • Collection of hazardous waste
  • Warehousing and storage of non-food products, except grain and oil
  • Railway operation

The LLP has not been able to boast about large tax payments since 2018 despite the variety of services provided. The company paid 36,302,584 tenge in 2016 and 2017. The treasury has not received anything since then.

Boranbayev's Assets

Kairat Boranbayev’s younger brother owned a land plot in the Medeu district of Almaty, which he purchased in August 2020. He started approving construction projects in September. On February 11, 2021, he received an architectural and planning assignment for the construction of residential buildings on 222/2 Taimanov Street. The plot covers an area of 96.12 acres. Construction began directly in March 2021, as notified by the Department of Urban Planning Control of Almaty.

An advert for a plot at the same address, only with an area of 97.29 acres, was priced at 636 million tenge on the Krisha.kz website. It has since been deleted.

If we compare the map of the land cadastre and 2gis, then Kairat Boranbayev's plot and the Sovmin clubhouse seem to be in the same place. The residential complex was commissioned in the IV quarter of 2021.

It consists of five houses with 35 apartments and a spacious roof terrace. The owners of duplex apartments on the ground floor received their own terrace of 12 square meters as a gift.

The developer was Ertok Yapi Malzemeleri. Almost nothing is known about it. The company operates in the primary real estate market of Kazakhstan, builds elite residential buildings in Almaty and uses premium environmentally friendly building materials. Ad sites recommend finding any other information on its official page. Google and Yandex searches for it proved to be difficult. The only residential complex that the developer built remains the Sovmin club house.

Screen korter.kz

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. 

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