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bne June 2018 Companies & Markets I 17
Saudi fund lines up 51% of troubled Tajik bank amid anti-Iran rhetoric
Kanat Shaku in Almaty
Troubled and largest Tajik lender Tojiksodirotbank (TSB) said on May 14 that it has agreed a deal in principle in which Saudi Investment Group will acquire 51% of the bank. No terms or timetable for the planned acquisition of the Dushanbe-based bank were revealed.
The announcement followed meetings with Saudi Investment Group chairman Al Waleed Al Dahash Al Tuwaijri on May
11. Tajikistan has to date been unsuccessful in its attempts at prompting foreign investors to bail out TSB and other lenders in its ailing banking sector. Talks, for instance, took place
with the European Bank for Reconstruction and Development (EBRD), which it was proposed might pick up a controlling stake in TSB controlling stake for $80mn, but the discussions proved to no avail. Efforts made by Tajik authorities to acquire stabilisation funds from the International Monetary Fund (IMF), meanwhile, have not borne much fruit.
The Tajik banking sector was hit hard by economic troubles
in 2015-2016, much of them linked to declining exports to, and remittances from, Russia. The situation left many Tajik businesses and individuals unable to repay their loans to banks and microfinance institutions, although the Tajik economy has been recovering thanks to the moderate economic stabilisation in Russia. However, irresponsible lending practices, including the handing out of loans to well-connected individuals and business associates, are believed to be a major reason behind the banking woes.
In 2017, authorities attempted to rescue distressed banks with capital injections to avert a potential liquidity crisis. But the move appears to have been insufficient. Agroinvestbank, along with TSB, have been given injections of Tajikistani Somoni (TJS) 1.7bn (€162mn) and TJS2.25bn, respectively, but they are still experiencing difficulties. TSB still owed customers $102mn as of end-2017.
The Dushanbe Economic Court launched liquidation processes for Tajprombank and Fononbank in March last year, following the Tajik central bank’s announcement that it was pulling the
Are the Saudis coming to Tojiksodirotbank's rescue as part of a geopolitical game aimed at shutting out Iran?
two banks’ licences. The banks were originally supposed to receive TJS530mn for recapitalisation.
In January 2018, the ex-Soviet nation’s Finance Ministry bought a 85.9% stake in the bank by issuing bonds and selling them to the Tajik central bank.
Saudi plan to isolate Iran?
Some believe the arrival of Saudi investment in the rescue is driven by Saudi Arabia’s aim to alienate Dushanbe from its regional arch-rival Iran. Riyadh's ambassador to Tajikistan, Abdulaziz bin Mohammed Al-Badi, bragged in an interview in September of successfully pursuing diplomatic overtures that led to the “expul- sion of Iran and its agents from the country,” Eurasianet reported.
“Saudi Arabia’s aim is to alienate
Dushanbe from its regional arch-
rival Iran”
Tajikistan’s common Persian history with Iran has proved insufficient in keeping Dushanbe from complaining about Tehran's alleged intrusions in Tajik politics throughout recent decades. Such accusations reached new heights last August when Dushanbe condemned Iran for alleged involvement in Tajikistan’s 1992-97 civil war. It marked the first time that the Tajiks had publicly blamed Iran for meddling in the conflict.
According to allegations aired by Tajik state television in a documentary, Iran supposedly sent assassins and saboteurs into the former Soviet nation to support an Islamist-led rebel force. Three Tajiks shown in the documentary confessed to the killing of politicians and other prominent Tajik figures as well as attacks on a Tajikistan-based Russian military base. The trio, the documentary claimed, received financial support and training from Iran.
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