Lesson from Masimov: protecting personal interests at a high international level

Ex-Prime Minister and former head of the National Security Committee Karim Masimov, serving an 18-year term, was quite good at converting his status into hard cash, including at the international level.

Perhaps the first accusations of selfish use of his political weight were major scandals in connection with China’s project to grow soybeans and rapeseed in Kazakhstan and lending to government projects through the Chinese Eximbank.

Some opponents and journalists, even before the arrest and charges brought, drew attention to how closely China is woven into the biography of a high-ranking Kazakh citizen. And Karim Masismov’s experience of successful cooperation with foreign companies and countries was called rich, including in a sarcastic sense. China was China, but Masimov did not limit himself to it; his horizons were clearly much wider. Here is just one example of fruitful cooperation for him.

Since 2008, Prime Minister Massimov has met several times with the CEO of the telecommunications company Telia Company, Lars Nyberg. It seems that there is nothing special, because Karim Masimov did not hide the fact that he was involved in attracting investment to the country. However, further facts indicate that Telia representatives also invested in him personally.

It is documented that in 2009, in the interests of this company, the prime minister asked to provide it with the necessary 3G frequency band by contacting the government agencies responsible for this. While continuing to supervise the issue of obtaining a GSM Kazakhstan license, by his order the current legislation suddenly changed. In particular, at his request, payments required for license holders were reduced several times. Instead of 2.8 billion tenge (approximately $8.2 million) per year to 500 million tenge (1.4 million dollars). In November 2010, these amendments were signed by Nursultan Nazarbayev. And a source from his administration claims that such beneficial and timely changes for Telia would not have been possible without Masimov’s help and interest.

Around the same time, Telia acquired the dormant AR-Telecom LLP and KT-Telecom LLP, paying about $25 million for their WiMAX licenses. But later it’s more interesting and louder. In 2012, Telia, through a Dutch subsidiary, bought the remaining 49% of GSM Kazakhstan at a price significantly higher than the real one – for a fantastic $1.5 billion. Due to a quarrel between another key figure in those schemes and Nazarbayev, negotiations since 2011 were completed by Masimov. A former Telia executive later said that this was the first significant kickback that Telia paid to Kulibayev and Masimov.

And there are dozens, if not hundreds, of such episodes in Karim Masimov’s career. And although law enforcement agencies have begun to gradually unravel this tangle, they will have enough work to do for years. On the other hand, Masimov is in no hurry; the articles imputed to him do not provide for early release.