The authorities of Kazakhstan have been actively working for several years to recover improperly acquired or extracted funds back into the country's budget. In some cases, the state confiscates assets as part of a criminal case, while in others, owners voluntarily transfer illegally obtained property to the LLP "Asset Recovery Management Company" (ARMC) to avoid legal disputes. To date, the company has received 70 assets totaling 89.9 billion tenge, as reported by inbusiness.kz.
Despite being established in 2023, ARMC actually began its operations in 2024. Currently, it manages the "Duman" hotel complex, stakes in the authorized capitals of companies ("Zharkent Su", "Tulpar"), a production base, a cafeteria, gas stations, land plots, unfinished construction, and jewelry worth 2.8 billion tenge.
Additionally, Kazakhstan has returned assets abroad totaling 29.89 billion tenge:
- UAE — 2 villas and 2 cars (17.09 billion tenge);
- Russia — 5 apartments, 5 storage rooms, and 5 parking spaces (4.78 billion tenge);
- Turkey — 2 houses and an apartment (4.20 billion tenge);
- France — 4 apartments (3.82 billion tenge).
Since July 2024, the company has sold assets worth 12.6 billion tenge, of which 8.2 billion tenge was from Kazakhstan and 4.4 billion tenge from foreign real estate. For instance, luxury cars Aston Martin and Rolls-Royce were sold in the UAE, and two houses in Bodrum and an apartment in Istanbul were sold in Turkey.
"The year 2024 marked the start of the company's activities. During this period, the management company generated revenues totaling 13 billion tenge, of which 12.6 billion tenge came from asset sales, and 467 million tenge was from asset management income. Until the assets are sold, the company manages them using tools such as leasing and trust management. This helps maintain the economic attractiveness of the assets for potential buyers and minimizes possible losses. The company's revenue structure revolves around these two areas – asset sales and their management, with the largest share of income coming from sales," the company explained.
All proceeds are directed to the Special State Fund (SSF), which finances social and economic projects.
Challenges in Sales and Management Income
Not all seized assets can be sold quickly. For example, the "Duman" hotel complex in Astana, with a starting price of 13.8 billion tenge, remains under the company's management. However, even under these conditions, the asset generates profit for the state.
"According to the results of Q3 2024, dividends from its operation amounted to 93.2 million tenge, and all these funds were allocated to the special state fund to support socially significant projects. It is important to note that the hotel complex has ongoing obligations to tenants and planned cultural and entertainment events until the end of the current year," the company noted.
The company indicated that they plan to hold another auction to sell this asset.
Discrepancies in Data
The transparency of ARMC's operations raises questions. For instance, the Adata website states that the company paid taxes amounting to 13 billion tenge for 2024. However, ARMC denied this information.
"During its operational period, the management company paid local property taxes for the assets on its balance sheet amounting to 226 million tenge. For Q3, VAT of 93 million was accrued from asset sales, which was timely paid to the republican budget," the company's official response stated.
There are also discrepancies regarding employee salary data. According to Adata, the number of employees is 56, with an average salary of 1.5 million tenge.
"Salaries in the company are based on the official salary, taking into account vacation pay, health benefits, and other incentive payments provided by the wage system. The main expense item for the company relates to tax obligations. For example, the corporate income tax (CIT) is 20% of income according to the tax legislation of the Republic of Kazakhstan," ARMC stated, without disclosing the average salary within the company.
Benefits to Society
As mentioned earlier, all funds from asset sales are directed to a special state fund. To date, the Republican Budget Commission has approved the construction of the following facilities using the proceeds:
- sports complexes in the village of Zerenza, Akmolinsk region, and the village of Zhalanash, Almaty region;
- a children's music school in the village of Temirlan, Turkestan region;
- a psychoneurological institution for individuals over 18 in Semey, Abai region;
- a kindergarten for special needs children for 300 places in Aktobe;
- hostel for the Sairam boarding school-college in Shymkent;
- a kindergarten for 280 places in Petropavlovsk;
- two-story schools for 80 places in the station of Manadyr and in the city of Karaganda in the Ulytau region;
- a school for 200 places with a preschool mini-center for 30 places in the village of Rudnichny, Zhetysu region;
- construction of a secondary school for 60 places in the village of Koksai, Zhetysu region.
It was previously reported that all assets located in Kazakhstan are sold on the portal e-qazyna.kz. Everyone interested can participate in the auctions. As for their pricing, the valuation is carried out by the transferring party. The auctions are conducted using the English method – the price is successively raised until only one participant remains.