On March 12, 2024, a note was published on the website pavon.kz under the heading “The Pavlodar Housing Relations Department bought housing for 3.5 billion tenge in violation of the law,” which reported on allegedly identified violations in the work of the Pavlodar regional branch of KazAgroFinance JSC.

“It turned out that KazAgroFinance lent agricultural equipment to the Sungat farm. Moreover, it was deregistered while the contract was still in effect,” the media report says.

This information is not true.

KH "Sungat" is an operating enterprise and has not been deregistered. The client pays lease payments on time; KH is not in arrears.

“The audit found that KazAgroFinance JSC unreasonably accepted reports on the assessment of movable property, where the customer is DAN-Agro PVL LLP. At the time of drawing up the valuation reports, the company did not have any ownership rights to the property, which is a violation of the law. In addition, KazAgroFinance entered into financial leasing agreements, where, in addition to the leasing object, land plots with the right of temporary paid land use were accepted as collateral. The audit established facts when the lessee’s land use right expired before the financial leasing term,” the material reports.

In accordance with the Law of the Republic of Kazakhstan dated January 10, 2018 “On Valuation Activities in the Republic of Kazakhstan,” the customer is an individual and (or) legal entity that has entered into an agreement to conduct an evaluation. Therefore, the customer does not have to have ownership of the property being assessed.

Further, according to paragraph 12 of Article 8 of the Law: “The agreement for the assessment must contain details of the document confirming the customer’s ownership of the object of assessment or other grounds giving the customer the right to conclude an agreement for the assessment.” In this case, the basis is an appeal from a potential buyer, namely DAN-Agro PVL LLP as a third party, which is confirmed by written appeals to KazAgroFinance JSC.

The potential buyer of DAN-Agro PVL LLP in 2021 and 2022 initiated the assessment of agricultural machinery, and this is not a violation of the Law.

Reports of independent appraisal companies undergo mandatory analysis by employees of KazAgroFinance JSC to ensure that the calculations comply with the requirements of the Legislation.

Regarding the fact that “in total, KazAgroFinance concluded 27 leasing agreements with violations of the terms,” we report the following.

We are talking about projects for which the right of temporary paid land use ends earlier than the term of the financial leasing. The validity period of a financial leasing agreement is determined based on the useful life of the leased asset. In addition, in accordance with the norms of the Land Code of the Republic of Kazakhstan No. 442 dated June 20, 2003, upon expiration of the lease agreement, a temporary paid land user (tenant), who has properly performed his duties, has, unless otherwise established by the laws of the Republic of Kazakhstan or the lease agreement, preferential before other persons the right to conclude a contract for a new term.

Thus, in order to reduce the client’s debt burden, taking into account the possibility of extending the lease term of the land plot, leasing agreements were concluded for a period exceeding the validity period of the temporary paid land use right.

Due to the fact that the note published on the Internet resource pavon.kz under the heading “The Department of Housing Relations of Pavlodar bought housing for 3.5 billion tenge in violation of the law” contains distortions and inaccuracies, KazAgroFinance JSC requests that incorrect information be removed from the material .

Joint Stock Company “KazAgroFinance” is part of the group of companies JSC “National Managing Holding “Baiterek”. The largest financial institution that provides leasing services to agricultural producers for the purchase of agricultural equipment. The company has been operating for more than 24 years, contributing to the development of technical equipment in the country's agricultural sector.