Another consequent hearing of the case concerning the former akim (mayor) of the Atyrau region, held on the 20th of February of this year, was focused on the issue of municipal property privatization. According to the allegations of the prosecution, all of this property had been transferred into private ownership illegally. However, even taking into account everything the witness said, I personally did not see any specific criminal motive.

To start, I want to remind you that any municipal property was not privatized due to the personal initiative of the former regional mayor. This was stated as a requirement in numerous  Presidential decrees and in his requests during government meetings. Following this, the government issued a decree outlining that all regional akimats (mayors) had to transfer non-strategic and non-profitable public facilities into a competitive environment to preserve them and boost economic development. I can say that the Atyrau region – is the only one which has not fulfilled these requirements and that in other areas of the country, most public properties have long been transferred into the private sector.

And now to the main focus of the charges. The investigation accuses the former mayor of the Atyrau region, that printing facilities and other municipal properties were privatized by the so-called Dutch method, which relies on gross underpricing. As an example, according to one witness, the MSE building named “Atyrau Akparat” valued at approximately 600 million. tenge was sold to LLP “Mistol” for 206 million. tenge. Now let’s take a look at what this building presents: in 2003, its construction cost about 510 million tenge. The current price of the this property is around 1.5 – 2 million US dollars , which is approximately 300 million tenge. Where did the estimate of 600 million tenge come from? Every year, the maintenance costs of “Atyrau-akparat” to the regional budget were about 350 million tenge. Is there any sense for the regional government to maintain this non-strategic and unprofitable asset?

For all other properties, the privatization issue is treated the same way by the prosecution. Investigators are using the help of their own expert appraisal companies to inflate prices for all properties mentioned in their case (so why not let them try to sell these items at these prices but not neglecting the economic devaluation factor of 25%, which will be impossible, as the prices are unreal.) This is nonsensical since all the procedures for awarding tenders were within the framework of the law. Earlier, at the beginning of the investigation, all the accused argued the legitimacy of their actions as being within the law and defended themselves. But, unfortunately, three months after increasing pressure, blackmail and fraud from the side of the prosecution, many changed their testimony, to pinpoint the former mayor as being corrupt. As a result, without even realizing, the defendants created a trap for themselves, by buying into the dirty tricks of the prosecution. This was what the investigation needed. At the same time all the promises the prosecution made, were unfulfilled, which essentially meant that they have provided false evidence that will be used against them. And that’s how the basis for a criminal case was formed!

Now, some more details: we should not forget that according to the law, if the object is not sold according to the “English method”, meaning that it is not sold for a higher valued price, then the third time the object will be privatized according to the Dutch method, due to a lack of interest of any party. That is exactly what happened. Let me ask, so where is the violation? Such a procedure is spelled out in the law and is not a byproduct of someone’s fantasy. Moreover, the announcement of the sale of these properties, even the attempts to sell at inflated prices, were published by regional media sources. And the fact, the compliance of these procedures is outlined by provisions in the country’s property laws, which can be confirmed by expert witnesses. For example, if you take the printing press building, which with the equipment is valued at an estimated cost of 77 million. tenge was sold to LLP “US-99″ for 25 million. tenge. The witness was involved in the contest sales of the printing property and confirmed that the first two trading contests were held according to the English method, and at the appraised value of 77 million tenge. According to him, only the third time, due to lack of participants, in a competition held by the Dutch method, with lower interest rates, the printing property was sold for 25 million tenge.

If we discuss the reasons why even taking into account the materials in the printing business and the value of the office space, the property could not be sold at it’s initial value price, then there can be many speculative theories, but it is actually quite simple and logical. Not only did many of these municipal properties have many financial debts as well required major renovations or repairs, but the contract for acquisition required a constant investment from the developer/owner.

And at this point it is appropriate to recall the words of a witness, the Deputy Chief of the Investment Bureau, Serik Demegenov to that confirm the points above. In particular, according to Demegenov, at the time, the now deceased Chief Accountant of MSE “Atyrau Akparat”, Uteshev cited high costs associated with the maintenance of the building. Also among the documents was the conclusion of a consulting company, confirming the deterioration of buildings MSE “Atyrau Akparat” by 80%.

So what’s so surprising here? Who would have agreed to pay as much as 600 million for the building, which even with the necessary investments would never had generated enough income in the future to make it profitable? In other words, such an acquisition at an inflated value and with worn-out equipment, from a business standpoint, would be simply unprofitable. Of course, when there is a low demand, there are lower rates. And this is a normal aspect of economics and business, which is why the Dutch method was established by law, since it takes into account these business practices and considerations. It is this procedure under which privatization took place, the details of which are being analyzed in court. And it is possible that the mere fact that these facts are quite obvious, there is a certain pressure being applied by the law enforcement system, which has long been known through the local media and based on the testimony of some of the defendants, that the financial police prefer to personally control – “what and how a witness says something. ” In particular, before the hearing, one of the lawyers drew the attention of the presiding judge that in the hallway, where there is a live broadcast, an investigator of the Financial Police, named Sarin was present. Lawyers interpreted this as intent to psychologically influence witnesses during their testimony in court. It is clear that investigators of the financial police, even during court sessions, are putting pressure on witnesses in the waiting room. Why is this “unlawfulness” being permitted and why are these investigators not being brought under scrutiny and punishment? Each investigator fears for their own fabricated case, and therefore are putting pressure on witnesses. If their case fails – their superiors will not pat their heads gently. Their ultimate goal is to somehow prove that a completely legal privatization procedure is some kind of terrible crime resulting from corruption. And this is all in the absence of any documentation or any other solid evidence.

So what relationship do these companies, which have purchased these properties have to the former akim and his family? Believe me when I say that Ryskaliev has relation to these companies – and it is not difficult to believe. So what does the prosecution want to prove during trial and what are they going to prove? From all this it is evident that this case is a product of specific political motivations that are working against the former head of the region.

To be continued ….