Why is NU's Former Head Defending Massimov?

A hot topic of last year was the return of the Jusan Group's assets to Kazakhstan. Kazakhstan's media was mostly limited to press releases from the Prosecutor General's Office and Nazarbayev University on this issue. Orda.kz also covered it from the very beginning. Recent events have brought us back to this topic. 

Alls Well That Ends Well

The case of the Jusan Group has been successfully closed since 2023's end. Assets worth $1.5 billion have been returned to their homeland, most former beneficiaries of the group have no grievances, the bank continues to operate, and, according to some reports, is finalizing a new development strategy, while some insiders' promised bank run has not occurred.

But in December 2023, Shigeo Katsu, former president of Nazarbayev University and former chairperson of the Board of Jusan Bank, did not go down without a fight.

His article "Fate of University that Broke Mould in Kazakhstan is in The Balance" was published on Intellinews. In it, Katsu spoke about the importance of artificial intelligence for the future of mankind. He then claimed that "the fate of the university is on a knife's edge." He, however, did not mention Jusan Bank. The article did not arouse interest in Kazakhstan's domestic media space.

In February 2024, Katsu raised the stakes. Published on Reaction.life, his article "Defenders of Liberal Values Should Call out The Sabotage of Nazarbayev University," is more emotive. Katsu calls on the foreign partners of Nazarbayev University to protect the educational institution. Katsu drew attention to the expansion of Russian universities into Kazakhstan and "encroachments on financial freedom". The aforementioned expansion, however, has not begun and it is unclear how it would interfere with Nazarbayev University.

In this article, Katsu begins to show his hand. He calls the transfer of Jusan Group's $1.5 billion asset management to the United States (New Generations Foundation (NGF) — ed.) "an investment decision that would provide the university and intellectual schools with financing for many years to come." The Republic of Kazakhstan, on the other hand, considers it theft. Katsu also touches base on the creation of Jusan Bank: "At the request of the government, we invested in bankrupt banks, consolidated them, digitized them, and made them profitable."

Masks Off

In March 2024, an article "Former President of Nazarbayev University Issues Warning" was published on the University World News website. It was not written by Katsu but does quote him, covering other opinions, including opposing ones. The article's rhetoric is stronger and reveals Katsu's intention, i.e. publicly defending Karim Massimov.

Noteworthy points:

•  Katsu considers Massimov a "scapegoat in the intra-elite struggle"
•  Katsu considers the information attack on him "orchestrated according to Russian patterns" and sees his "impeccable reputation" inconvenient for many in Kazakhstan
•  Katsu notes that he met with Nursultan Nazarbayev two or three times a year
• Katsu believes that the loss of independence by Nazarbayev University will lead to relations being disrupted with foreign partners of the university
• Sirke Mäkinen, a lecturer at the University of Helsinki and an expert on international cooperation of Russian universities, does agree with Katsu on the increasing Russian pressure on Kazakhstan after February 2022. Yet, she emphasizes that the government of Kazakhstan perceives Nazarbayev University as a flagship and, most likely, plans to change only the funding model.
•  Saltanat Dzhanenova, an ex-employee of Nazarbayev University, emphasizes that NU accounted for a third of all government spending on education, that the university's contracts with foreign partners were not transparent, and that the funding model advertised by Katsu was not sustainable and required constant injections from the state budget.
•  Katsu, without naming anyone, speaks of a "Kazakh oligarch" who concluded a "very bad" deal with the ex-beneficiaries of the Jusan Group and took over asset management for himself. He is referring to Galimzhan Yesenov, who, after "buying" ATF Bank, did not influence Jusan Bank whatsoever.
• Katsu believes that NU and NIS should have received "at least half" instead of 5% of the deal. He claims that he was counting on dividends from Jusan Bank to invest them in NU and NIS.

Quite The Track Record

Orda has already written about Shigeo Katsu's work in Kazakhstan.

In the article "The Story of One Rector: How Shigeo Katsu and A Destroyed Albanian Village Are Connected", we talked about the demolition of an Albanian village. This may have inadvertently happened as a consequence of the World Bank project "Integrated Project for Cleaning and Rational Use of the Coast", in which Katsu held the post of vice president. Coincidence or not, he was fired from the World Bank after this controversy and immediately got a position in Kazakhstan.

In the article "Is Nazarbayev University Trying to Cut Ties with Shigeo Katsu?" we wrote about the abuse of administrative resources, highlighting the example of the creation of the University Medical Center Corporate Fund. Significant medical assets were transferred to it. We also emphasize the imbalances in financing - $10 million per year from the Nazarbayev Foundation against 60 billion tenge per year from the state budget. Katsu's attempts to "adjust" Yesenov's stake in Jusan Bank in March 2022, which prompted the latter to file a lawsuit with the London Arbitration, are also noted.

In the article "Jusan’s Iliad Comes to an End, The Odyssey Begins", we wrote in detail about who, how, and by what methods Jusan Bank was created, how its assets were withdrawn from the country, and how Katsu had pushed back on their return.

One detail is nonetheless missing - a description of Shigeo Katsu's financial interest. Data from colleagues and public financial statements (2021, 2022) allow us to outline Katsu's "circle of greed" but do not give exact figures.

Meanwhile, our anonymous Telegram bot @orda2020_bot received the New Generations Foundation (NGF) form 990 for 2022. Organizations and charitable foundations that do not pay taxes submit similar forms to the US Internal Revenue Service (IRS).

In this document, which is publicly available under US law, many interesting details shed light on Shigeo Katsu's interest in rolling back national history by three years.

In 2021 (the form provides some data for the previous year), contributions to NGF amounted to $5.8 million, and in 2022 — $0. 

The investment income for 2021 amounted to $12.9 million, and in 2022 — a little more than $12 million. This is enough for annual NGF payments to NISs (as mentioned above, 10 million dollars annually), but where does one get the remaining 60 billion tenge per year?

NGF grant payments have plummeted from $11.9 million in 2021 to $2.46 million in 2022. The Foundation was not eager to sponsor its sponsees supported by government subsidies.

Most importantly, in 2022, Katsu received 553 thousand dollars from NGF-related organizations for 5 working hours on average per week, making him by a wide margin the most expensive NGF manager. If there are 52 weeks in a year, then Katsu, who worked about 260 working hours per year in the Fund, received a little more than two thousand dollars per hour.

This all explains Katsu's attitude towards the return of the Jusan Group's assets to Kazakhstan. Indeed, he has lost not only the "NGF honeypot" but also all others, which were no less sweet. Public support for Karim Massimov and doubts about Kazakhstan's foreign policy are unlikely to help him achieve his aims.

Original Author: Orda

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