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'Ethical concerns' raised at Kazakhstan’s $63 billion Samruk-Kazyna Fund



Akhmetzhan Yessimov, the chairman of Samruk-Kazyna, has been criticized by Kazakhstan’s public accounts committee over ethical issues at the $63 billion sovereign wealth fund.

Kazakhstan’s accounts committee said that the huge state-owned fund lacked transparency and its profitability was falling in real terms.

Samruk was established in 2008 to help develop the Kazakh economy but under Chairman Yessimov the fund has seen its earnings before tax, depreciation and amortisation (ebitda) margin fall from 18.7% in 2017 to 16.5%.

“There is still no transparency in procurement procedures, most of the holdings funds continue to be placed in a non-competitive way,” the committee’s report said. "Systemic problems have been identified, which are the reasons for the ineffective use of state resources and restraining the development of the market economy.”

The accounts committee also raised concerns about Samruk’s 144bn tenge ($350 million) of cash deposits with ATF Bank, which is run by Yessimov’s son-in-law Galimzhan Yessenov.

The committee highlighted that Samruk’s rules require it to hold cash only at financial institutions with an 'A' credit rating but ATF has a rating of 'B-', which is considered junk status by analysts.

A Samruk subsidiary, Kazmunaygas, holds a further 80bn tenge ($190m) in deposits at ATF, also in breach of credit rating requirements.

The committee noted that Samruk’s chairman, Yessimov, is the father-in-law of ATF’s boss Yessenov – a revelation that has raised concerns over governance and possible corruption at the giant sovereign wealth fund.

The cash deposits were among a number of “ethical issues” raised by the accounts committee in its annual assessment of state-owned enterprises.

According to the committee, Samruk claimed profits of 1,141 billion tenge ($2.6 billion) in 2018, up 534 billion tenge on the previous year. However, the committee said that this increase in profits was inflated by a non-cash change for subsidiaries consolidated into its accounts, an increase in oil prices and positive exchange rate movements.

“Without considering these factors, the factual profits even decreased,” the committee said. “This is confirmed by a significant deterioration in the EBITDA indicator with margins falling from 18.7% in 2017 to 16.5% in 2018.” The margin was 25.3% in 2014.

Yessimov has been under pressure from Kazakhstan’s government to increase the dividends paid out by Samruk. Following scrutiny of Samruk’s poor profitability and the illegal deposits at ATF Bank, Yessimov was forced in July to increase its dividend payments to 120bn tenge, 10 times more than in 2017.

Samruk has also agreed to help with Kazakhstan’s COVID response and has bought personal protective equipment, ambulances and ventilators.

Yessimov, 69, has held a number of prominent roles in Kazakhstan’s government including deputy prime minister and mayor of Almaty. He is a close ally of former President Nursultan Nazarbayev and it is thought that his wealth stems from his political connections.

In 2007, Yessimov helped his son-in-law, Galimzhan Yessenov finance the $120m acquisition of a fertilizer company called Kazphosphate.

Samruk’s assets include the Kazakh postal service, and rail network, the oil and gas producer Kazmunaigas and Air Astana. The fund was founded to mirror the success of Singapore’s sovereign wealth funds, Temasec and GIC, in developing national business champions.



Iranian Opposition rally in front of US embassy in Brussels to ask US and EU for a firm policy towards Iranian regime



Following the G7 summit in London, Brussels hosts the NATO summit with US and EU leaders. It is the first trip of President Joe Biden outside the US. Meanwhile, the Iran deal negotiations have started in Vienna and despite the international efforts to return Iran and the US to compliance with the JCPOA, Iranians regime showed no interest to return to its commitments under JCPOA context. In the recent IAEA report, important concerns have been raised that the Iranian regime failed to address.

The Iranian diaspora, supporters of the National Council of Resistance of Iran in Belgium, held a rally today (14 June) in front of the US embassy in Belgium. They held posters and banners with the picture of Maryam Rajavi, the leader of the Iranian opposition movement who has declared a non-nuclear Iran in her 10-point plan for the free and democratic Iran.

In their posters and slogans, Iranians asked the US and the EU to work harder to hold the mullahs’ regime accountable for its human rights violations too. The protesters emphasized the need for a decisive policy by the US and the European countries to harness the mullahs’ quest for a nuclear bomb, stepped up repression at home, and terrorist activities abroad.

According to the new IAEA report, despite the previous agreement, the clerical regime refuses to answer IAEA questions on four disputed sites and (to kill time) has postponed further talks until after its presidential election. According to the report, the regime's enriched uranium reserves have reached 16 times the limit allowed in the nuclear deal. The production of 2.4 kg of 60% enriched uranium and about 62.8kg of 20% enriched uranium are of grave concern.

IAEA Director-General Rafael Grossi said: Despite agreed terms, “After many months, Iran has not provided the necessary explanation for the presence of the nuclear material particles…We are facing a country that has an advanced and ambitious nuclear program and is enriching Uranium very close to weapons-grade level.”

Grossi’s remarks, also reported by Reuters today, reiterated: “The lack of clarification of the agency’s questions regarding the accuracy and integrity of Iran’s Safeguard Declaration will seriously affect the agency’s ability to ensure the peaceful nature of Iran’s nuclear program.”

Maryam Rajavi (pictured), the President-elect of the National Council of Resistance of Iran (NCRI), said that the recent report of the International Atomic Energy Agency (IAEA) and the remarks by its Director-General once again show that to guarantee its survival, the clerical regime has not abandoned its atomic bomb project. It also shows that to buy time, the regime has continued its policy of secrecy to mislead the international community. At the same time, the regime is blackmailing its foreign interlocutors into lifting sanctions and ignoring its missile programs, export of terrorism, and criminal meddling in the region.

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Ex-EU Brexit negotiator Barnier: UK reputation at stake in Brexit row




Head of the Task Force for Relations with the UK, Michel Barnier attendsthe debate on EU-UK trade and cooperation agreement during the second day of a plenary session at the European Parliament in Brussels, Belgium April 27, 2021. Olivier Hoslet/Pool via REUTERS

Michel Barnier, the European Union's former Brexit negotiator, said on Monday (14 June) that the reputation of the United Kingdom was at stake regarding tensions over Brexit.

EU politicians have accused British Prime Minister Boris Johnson of not respecting engagements made regarding Brexit. Growing tensions between Britain and the EU threatened to overshadow the Group of Seven summit on Sunday, with London accusing France of "offensive" remarks that Northern Ireland was not part of the UK. Read more

"The United Kingdom needs to pay attention to its reputation," Barnier told France Info radio. "I want Mr Johnson to respect his signature," he added.

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Parliament president calls for a European Search and Rescue Mission



European Parliament President David Sassoli (pictured) has opened a high-level interparliamentary conference on managing migration and asylum in Europe. The conference focused particularly on the external aspects of migration. The president said: “We have chosen to discuss today the external dimension of migration and asylum policies because we know that only by tackling the instability, crises, poverty, human rights violations that occur beyond our borders, will we be able to address the root causes that push millions of people to leave. We need to manage this global phenomenon in a human way, to welcome the people that knock on our doors every day with dignity and respect.
“The COVID-19 pandemic is having a profound impact on migration patterns locally and worldwide and has had a multiplier effect on the forced movement of people around the world, especially where access to treatment and healthcare is not guaranteed. The pandemic has disrupted migration pathways, blocked immigration, destroyed jobs and income, reduced remittances, and pushed millions of migrants and vulnerable populations into poverty.
“Migration and asylum are already an integral part of the external action of the European Union. But they must become part of a stronger and more cohesive foreign policy  in the future.
“I believe it is our duty first of all to save lives. It is no longer acceptable to leave this responsibility only to NGOs, which perform a substitute function in the Mediterranean. We must go back to thinking about joint action by the European Union in the Mediterranean that saves lives and tackles traffickers. We need a European search and rescue mechanism at sea, which uses the expertise of all actors involved, from Member States to civil society to European agencies.
“Second, we must ensure that people in need of protection can arrive in the European Union safely and without risking their lives. We need humanitarian channels to be defined together with the United Nations High Commissioner for Refugees. We must work together on a European resettlement system based on common responsibility. We are talking about people who can also make an important contribution to the recovery of our societies affected by the pandemic and demographic decline, thanks to their work and their skills.
“We also need to put in place a European migration reception policy. Together we shoulddefine the criteria for a single entry and residence permit, assessing the needs of our labor markets at a national level. During the pandemic, entire economic sectors came to a halt due to the absence of immigrant workers. We need regulated immigration for the recovery of our societies and for the maintenance of our social protection systems.”

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