Two Tu-Ha Company Employees Sentenced in Embezzlement Case

An Aqtobe court has issued a verdict in a major corruption case involving employees of Tu-Ha Oil Technology Services Company, a subsidiary of China’s CNPC, Orda.kz reports.

Two company representatives — the accountant and deputy general director — were sentenced to eight years in prison for embezzlement and money laundering. The total damage caused by their actions exceeded six billion tenge.

Background

According to the case materials, from 2004 to 2020, the defendants withdrew and misappropriated company funds at the instruction of Chinese executives. They admitted in court that much of the money had been used to pay bribes to regional and state agencies.

Each month, the company reportedly transferred payments in U.S. dollars to officials in the Aqtobe regional administration and the labor department to secure permission for the employment of foreign workers. The migration service allegedly received $2.4 million for entry permits for Chinese staff, while the Department of Ecology was given $20,000 annually for chemical reagent approvals.

Customs officials reportedly received around $500,000 for reducing import duties.

Following the opening of the criminal case, Tu-Ha also made payments to the financial police, and, according to the investigation, $100,000 was given to the regional prosecutor’s office. In 2016, the company was found to have purchased a license for certain activities with cash despite failing to meet the requirements.

Expert's Take

Industry analyst Nurlan Zhumagulov drew attention to the verdict on his Telegram channel, noting further irregularities.

According to the defendant, another major expense was travel costs — about $4.5 million was spent on trips by Chinese employees to Kazakhstan. The company also covered luxury gifts for officials: foreign travel, expensive phones, perfumes, watches, and fitness memberships,
Zhumagulov wrote.

I reviewed the figures — they add up. Corporate income tax payments from 2006 to 2020 amounted to just 174 million tenge, while in the last four years alone they reached 700 million. On average, Tu-Ha received annual orders worth 2 billion tenge from its parent company, SNPS-Aqtobemunaigas, and continues to do so,
 he added.

Tu-Ha is a subsidiary of CNPC-Aqtobemunaigas, which is controlled by China National Petroleum Corporation (CNPC) — the country’s largest oil and gas enterprise.

Earlier this year, CNPC-Aqtobemunaigas was accused of abusing its dominant market position.

The most concerning issue is that SNPS-AMG’s oil operations reports to the Ministry of Energy don’t match its financial statements. In today’s digital environment, the Ministry could easily cross-check this data, as inconsistencies affect penalties for failing to meet local content requirements,
Zhumagulov noted.

Meanwhile, in China, corruption is punished severely — including by death penalty. Recently, a former minister of agriculture was executed for taking bribes.

Original Author: Nikita Drobny