 BTA fight poses threat to Kazakhstan banking Isabel Gorst, 01.05.2009  Pressure on Kazakhstan's embattled financial sector intensified yesterday after the former shareholders of BTA, the central Asian country's biggest bank, sued the government for $3bn in damages allegedly incurred during the forced takeover of the bank this year.Kazakhstan's sovereign wealth fund - Samruk Kazyna - paid $1.7bn in February to acquire a 75.1 per cent share in BTA, citing concerns about the bank's stability. The Kazakh prosecutors have since issued warrants for the arrest of the bank's former chairman on accusations of fraud, which he denies. The announcement yesterday came less than a week after BTA froze all debt repayments after two creditors called in $550m of loans. BTA's former shareholders accuse the government of expropriation and of action that has crippled the bank since the takeover. They have threatened a slew of arbitration cases in the Netherlands, Austria and Switzerland that could eventually involve $20bn of claims. Anvar Saidenov, BTA chairman, said former shareholders had filed two claims, each worth $1.5bn, in international courts. "The shareholders believe that their losses resulting from the entry of Samruk Kazyna to BTA amount to this sum," he said. Clyde & Co, a London-based law firm, is handling the filings. Mukhtar Ablyazov, the former chairman of BTA, said: "I'm sure that more actions will follow against the Republic of Kazakhstan considering the significant losses as a result of the wrongful actions of the government." Mr Ablyazov, who was jailed in 2002 on corruption charges after he helped found an opposition political party, but was later pardoned, fled to London after BTA was taken over. BTA declared a moratorium on debt settlements last week after Morgan Stanley and another unnamed global bank invoked change of ownership covenants to accelerate the repayment of the $550m in loans. Goldman Sachs and UBS are advising BTA on a debt restructuring scheme that will be presented to shareholders early in May. Analysts have warned that defaults could bankrupt BTA with severe repercussions for the Kazakh banking sector. Oksana Reinhardt, an analyst at Deutsche Bank, said: "This is going to be a big challenge, not just for BTA, but for the whole of Kazakhstan." BTA is in preliminary talks to sell shares to Sberbank, the Russian state savings bank, but no results are expected until KPMG has completed due diligence at BTA. Analysts said this would be complicated by BTA's ownership structure and the large proportion of offshore and related party lending in the bank's portfolio. BTA accounts for about $15bn of the $45bn of foreign debt held by Kazakh banks. The Financial Times, May 1 2009 |
