Asia-Pacific, Civil Society, Europe, Headlines, Human Rights, Press Freedom

Kazakhstan Divided Over Fugitive Banker

Christopher Pala

ALMATY, Mar 29 2012 (IPS) - As the trial began this week of 37 alleged participants in a strike-related riot, the man who did the most to help the striking oil workers and to publicise their cause, Mukhtar Ablyazov, remained far beyond the Kazakhstan government’s grasp.

Ablyazov, a wealthy banker who disappeared from view in February after he was sentenced to at least a year in jail by a London court on contempt charges, is variously seen in his native Kazakhstan as the only bulwark against the increasingly harsh rule of President Nursultan Nazarbayev; as a thief who betrayed his investors, and as the plotter of a series of terrorist attacks that were not carried out.

The diminutive 49-year-old Kazakh had fled to London, where he was granted political asylum, after the government rescued and took over BTA Bank in 2009, which he had turned into Kazakhstan’s largest. The institution faced bankruptcy after the global financial crisis dried up the flood of cheap credit that had funded the rapid expansion of Kazakhstan’s banks, revealing balance sheets choking on bad loans – none worse than BTA’s.

The current management of the bank sued Ablyazov in nine London courts, seeking to recover 5 billion dollars it claimed he illegally siphoned off as the institution collapsed.

Among those who knew him well in Almaty, Kazakhstan’s main city, there is little doubt that if he did indeed hollow out BTA’s assets, it was at least in part so he could continue funding the country’s biggest opposition party, along with two television companies and two newspapers.

“He had to choose between saving his bank and giving up opposition politics,” said Yevgeni Zhovtis, head of the Kazakhstan International Bureau of Human Rights.

“That’s no excuse for dishonesty,” said Jean-Claude Lermusiaux, head of research at Visor Capital, an investment bank in Almaty. “He betrayed the confidence of investors and he tarnished his country’s image.”

On Wednesday, the state prosecutor filed charges against two associates of Ablyazov who live outside the country, accusing them of having planned several terrorist bombings at Ablyazov’s instigation. The charges fit with earlier comments of Yermukhamet Yertisbayev, an adviser to Nazarbayev who often acts as his unofficial spokesman, who accused Ablyazov of using “information terrorism” to overthrow the regime through “revolution, mass unrest, chaos and violence.”

Zhovtis, the human rights activist, took a strikingly different view of the controversial banker. “Ablyazov is not pushing democracy out of ideology, he’s just part of a group of prominent technocrats who felt from the beginning that democracy and a fair court system would work better to develop this country,” he said in an interview.

In 2003, Ablyazov, a former industry minister, and a handful of high-level government officials, including a deputy prime minister, tried to found a party of loyal opposition that did not directly challenge Nazarbayev. Their aim was primarily to rein in one of the president’s sons-in-law, Rakhat Aliyev, who was accused of using a senior position in the successor agency of the KGB to pressure company owners to sell him their assets at cut prices and thus acquire a sizeable personal fortune.

Instead, the officials were fired and Ablyazov was jailed and lost half his assets.

As he explained to a U.S. diplomat in London in 2009, according to a Wikileaks cable, he resumed discreet funding of the opposition media and parties in 2005 while pursuing his goal of turning BTA Bank into the biggest in the former Soviet Union.

Bulat Abilov, another longtime opposition leader, quoted Ablyazov as telling him that because of those opposition activities, Ablyazov came under increasing pressure to cede control of BTA Bank to Nazarbayev and his allies.

Over the past three years, Ablyazov is widely believed to have provided financial support to two opposition newspapers, Respublika (whose editor works and lives in London for safety reasons) and Vgzlyad (whose editor was jailed, sentenced, pardoned and freed this year).

In addition, Ablyazov is believed to fund K Plus, a station on the Hotbird satellite which is run from London and, a web-based video production company headquartered in Almaty that covers subjects mainstream media avoid, like demonstrations protesting corruption and the oilmen’s strike in the western town of Zhanaozen.

All these organisations deny they receive any money from Ablyazov.

“The country has become like the Soviet Union, circa 1970, when dissidents were tried for anti-Sovietism,” said Zhovtis, the human rights activist. “Given the increasing repression, Ablyazov has been perceived not quite as Robin Hood, but more like (jailed former oligarch Mikhail) Khodorkovsky in Russia, using his assets to finance opposition parties and independent media. People who want more democracy and less corruption are grateful for his support, but the paradox is that there’s no proof the support exists.”

According to Dina Baididayeva, a democracy activist in a small Norwegian-funded organisation called Liberty who works in Zhanaozen, people associated with oil workers “support Ablyazov, watch K Plus and read Respublika and Vglyad, which are the only media reflecting the real situation here. And he’s the only one who has been supporting oil workers through his party Alga and the People’s Front movement.”

“Without Ablyazov, we would not have genuine democratic opposition parties and independent media,” said Murat Tungishbayev, a former staffer in Almaty for the Washington-based National Democratic Institute who trained the strikers at Zhanaozen how to use Twitter and Facebook to organise discussion groups on democracy.

“Without him, there would be very little counterpoint to police repression, corruption and election fraud,” he added. Ablyazov-funded organisations provided legal help to the strikers and now to the victims of the shootings, he said.

On Dec. 16, the 20th anniversary of independence, police tried to disperse pickets in Zhanaozen who had been standing in the main square since July, triggering a wave of unprecedented violence that left more than a dozen buildings burned. Videos posted on Youtube show police shooting handguns at unarmed demonstrators.

A journalist from Moscow’s Nezavisimaya Gazeta quoted a witness as saying she saw 64 bodies, while an opposition party said it has a list of 73 dead. The authorities say only 14 people were killed and are said to have forbidden the relatives of victims to speak out, local journalists reported.

On Tuesday, 37 people the government accused of participating in the riots were put on trial on Aktau, a port city 150 kilometres to the west.

“The reality in Zhanaozen is terrifying,” wrote Piotr Boris, a member of the European Parliament who visited the town of 100,000 last month. “We are aware that according to the witnesses’ statements, the number of killed was much bigger. However, this data is cannot be confirmed.”

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