Page 72 - bne Magazine February 2023

72 I Eurasia bne February 2023
Lax financial regulation and a lack of financial literacy led to around two- thirds of the entire population sinking an estimated $1.2bn into these schemes.
Violent protests and demands for then president Sali Berisha, still an influen- tial figure in Albanian politics today, to resign erupted into mass unrest, bring- ing the country to the verge of civil war.
Albania was flooded with firearms
as rebels looted army stockpiles in
the south, while in the north Berisha opened depots to allow citizens to arm themselves against rebel groups. Virtu- ally every man and boy over the age of 10 had at least one firearm.
The government managed to bring the situation under control in the north, but rebel groups and criminal gangs seized control of much of the south. The unrest only ended when an international peacekeeping force was sent in. More than 2,000 people were killed.
The Albanian author and academic Lea Ypi lived through the violence. In her memoir, Free, Ypi recalls crying in her room as fighting raged on the streets, and being told to stay away from the win- dow to avoid stray Kalashnikov bullets.
The collapse of the pyramid schemes and subsequent violence continued
to have repercussions decades later. Some of the weapons that Albanians took hold of during the unrest have still not been accounted for, despite a series
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of amnesties encouraging people to hand in illegal weapons. The vigilante gangs formed during this period were the precursors of some later criminal organisations. Distrust in the financial sector has held back the development of the local capital market.
2000s
Boom and bust for BTA in Kazakhstan
In Kazakhstan, BTA was the country’s largest bank in the boom years of the mid-2000s, when the country experi- enced an explosion in real estate prices that rivalled those in Western financial centres. But when the subprime crisis broke in the US, the inflated real estate market in Kazakhstan also started to unravel, which in turn hit the banking sector, with disastrous consequences for its biggest bank.
Mukhtar Ablyazov was chairman of
the board of directors at BTA, until it defaulted on $12bn of debt in 2009. BTA accuses Ablyazov of diverting much of those funds for his own gain. Investiga- tors claim Ablyazov developed several complex schemes aimed at financing investment projects in Russia, enabling him to systematically embezzle the bank’s funds in large amounts.
The ex-banker – who represents himself as an exiled dissident campaigning for political reforms as head of the banned Democratic Choice of Kazakhstan (QDT) party and is a constant thorn in the side
of the Kazakh ruling establishment, using online means to prompt street demonstrations of his supporters – stands charged with abuse of office, nine instances of serious fraud, three instances of money laundering and causing significant damages via fraudulent misrepresentation carried out by an organised group.
Ablyazov, a critic of former president Nursultan Nazarbayev, has been living in self-imposed exile in Europe since 2009. He was tried in absentia in the Kazakh business capital Almaty in June 2017 and sentenced to 20 years
in prison on charges of organising
and leading a criminal group, abuse of office, embezzlement of around $6bn and financial mismanagement. He has protested his innocence, describing his trial as politically motivated.
The fugitive banker's lawyers maintain that Ablyazov, rather than embezzling the $6bn claimed by the Kazakh govern- ment, restructured the bank's holdings with the goal of protecting them from
a government takeover of the bank that took place in 2009.
A year later, another court in Kazakhstan sentenced Ablyazov to
life in prison in absentia following
his conviction for orchestrating
the murder of ex-head of BTA Bank Yerlan Tatishev. Ablyazov is accused
of hiring Muratkhan Tokmadi in 2004 to assassinate Tatishev to gain control over the bank. According to the special inter-district court of Jambyl region, businessman Tokmadi shot Tatishev
on December 19, 2004. Ablyazov was elected as the chairman of the bank’s board of directors after Tatishev’s death.
Ablyazov initially fled Kazakhstan to the UK, where he was granted political asylum. After a British court issued
an order to arrest him for contempt of court, he then fled to France, where he is last known to have resided until now. He has reportedly recently been denied refugee status in France, according to reports by local Kazakh news agency KazTAG. It is unclear what the removal of the refugee status would mean for his future.