One of Kazakhstan’s key development priorities is increasing production capacities, especially for unique products that enhance the country’s export potential. Over the past decade, both presidents of Kazakhstan have announced the opening of new innovative production facilities. However, the country has lost several opportunities to develop its economy due to unscrupulous attempts to misuse state funds meant to strengthen export potential.
This is precisely how Kazakhstan lost a unique production of steel radiators. The equipment that was supposed to form the basis of the new plant was successfully sold to Russia, where it continues to benefit another country to this day.
How did this happen? Let’s break it down.
In 2005, funding was opened for a project to produce steel panel radiators in the Karaganda region, with a total cost of 49 million euros. The plant’s products were expected to meet domestic demand and be exported to Russia and Central Asian countries. The production was financed through JSC “Development Bank of Kazakhstan – Leasing,” which provided 33 million euros, with the remaining 16 million euros supposedly invested by LLC “Kaztherm.”
The plant was supposed to start operations in 2008. However, it only became operational in 2010. The grand opening was attended by Prime Minister Karim Massimov, and President Nursultan Nazarbayev participated in the launch via video link.
Despite the pompous opening, the plant operated for only four years. By 2015, the management announced that the enterprise was facing economic difficulties and could not continue operations due to unprofitability. In 2016, LLC “Kaztherm” began bankruptcy proceedings. At this time, the head of the enterprise was Aydin Gabdulsagatovich Alimov, whose notorious brother, Yermek Alimov, was the deputy akim (governor) of the Karaganda region. Yermek Alimov is known in Kazakhstan as a member of the Nigmatulin brothers’ team and a figure in the criminal case against journalist Makhambet Abzhan, who was sentenced to 9 years for extortion and spreading false information. According to Abzhan, Yermek Alimov was the mastermind behind the defamatory publications in his Telegram channel, Abzhan News.
Failing to meet leasing obligations, LLC “Kaztherm” declared bankruptcy and returned the equipment to the Development Bank of Kazakhstan. But this is where the story gets interesting.
Less than six months later, on October 13, 2017, the subsidiary of the Development Bank of Kazakhstan, JSC “DBK-Leasing,” sold the expensive Italian equipment from the bankrupt radiator plant to LLC “KKS-Karaganda” for 417 million tenge (1.245 million USD or 1.053 million euros at the exchange rate on the date of the transaction). Just a year later, on December 18, 2018, LLC “KKS-Karaganda” sold this equipment to the Russian company LLC “Euro-Trade” for 1.75 million euros.
Considering that the equipment had been sitting in the warehouses of LLC “KKS-Karaganda” for only a year, the deal was undoubtedly profitable. However, if we delve into open sources, we discover that the owner of LLC “KKS-Karaganda” at that time was none other than Yermek Alimov, who was also the deputy akim of the Karaganda region, where the ill-fated Kaztherm plant was located.
Here, we see a completely different picture. Before 2010, the enterprise received loan funds amounting to 33 million euros, operated for about five years, implemented a knowingly unviable project, then bankrupted it, and effectively bought back its own equipment at a price three times lower through an affiliated company. Subsequently, the equipment was sold at almost twice the price to Russia.
Notably, after executing this scheme, in 2019, Aydin Alimov assumed the position of akim of the Bukhar-Zhyrau district of the Karaganda region, where the Kaztherm plant was located, while his brother, the owner of LLC “KKS-Karaganda,” left government positions in 2018 and moved to the upscale suburb of Ascot, London, where he had previously purchased a mansion for 2.5 million dollars. Before moving from Kazakhstan, Yermek Alimov held the position of Chairman of the Board of JSC “Astanaenergoservice,” which was involved in the distribution of electric power capacities, including industrial facilities.
It is evident that both brothers emerged from this story with significant profits. Unfortunately, for the already unstable economy of Kazakhstan, the benefit to the Alimov family resulted in multi-million losses and billions of unrealized potential profits from a promising industry.
We are left with just one last question: why do people who enrich themselves at the expense of deceiving the state live in London rather than serving sentences under criminal law?