Kazakhstan investors unlikely to sue Cyprus for slashing accounts

08 августа 2013, 17:09

Financial experts doubt that Kazakhstan owners of slashed deposits in Cyprus will try to return their lost savings in court, Tengrinews.kz reports citing Olzhas Khudaibergenov, Director of the Center for Macroeconomic Research.

“To do so they have to be confident that all their money in Cyprus is of legitimate origin,” he said. According to the economist, even if the money is legal, there will hardly be any chance to return all of it. “The Cyprus authorities will probably offer more than what they have now, but it is unclear whether these amounts will cover the legal costs,” he said.

Olzhas Khudaibergenov. Photo courtesy of www.halyk-ipo.kz

       Olzhas Khudaibergenov. Photo courtesy of halyk-ipo.kz

Russian investment banker and head of Diamond Age Capital Advisors Slava Rabinovich recently declared that he was ready to evict the money for the clients of Cyprus’ Laiki and Bank of Cyprus from the Top 3 international creditors: the European Commission (EC), European Central Bank (ECB), and the International Monetary Fund (IMF). The banker suggest to create a pool of the cheated investors and jointly apply to court. Rabinovich's fee in case of victory will amount to 15 percent for the evicted amount.

Earlier Tengrinews.kz English reported that Kazakhstan invested $1.162 billion into Cyprus as of the end of 2012.

Meanwhile, Russian analyst of FINAM investment holding Anton Soroko believes that there is too much politics in the situation and Rabinovich’s chances for victory are small. “And I doubt that this initiative will be supported by Kazakhstan investors,” he added.

Anton Soroko. Photo courtesy of financial-rating.ru

Anton Soroko. Photo courtesy of financial-rating.ru

He believes that the amount of the investments in Cyprus’ banks is overstated. “Besides, the mentality will likely play its part as well. Many of the people may have no desire to spend time and money on the quite complicated process with unclear outcome. I believe that the process may take many years and it will be extremely difficult for the investors to get their money back from Cyprus banks. There is more chance that the stock that their savings were partially converted into will start bringing profit,” the expert said.

Senior analyst of the Agency for Research of Investments Profitability Murat Abulgazin said that the state amount of 1 billion Euro that was allegedly invested by Kazakhstan citizens into Cyprus banks had never been officially confirmed. The amount looks doubtful to him. “But we still cannot be absolutely sure that there were no such investors among Kazakhstan citizens. It is also a big question whether they will manage to get their money back. Not only Cyprus is going be against them, but also the whole European system that is undergoing a recession and is highly likely to ignore the interests of CIS citizens amid the current conditions,” the analyst said.

He believes that Kazakhstan authorities and official representatives should take a firm stand and help the investors return their money, even if the number of Kazakhstan investors with slashed accounts is not very big and the losses are not so large. “Of course, the prospects of returning this money in the nearest future are quite doubtful, but it is quite possible that the confiscated amounts will be eventually returned if not to their current owners, then to their successors,” the speaker said.

Murat Abulgazin. Photo courtesy of kursiv.kz

Murat Abulgazin. Photo courtesy of kursiv.kz

According to Abulgazin, Kazakhstan should check into the origin of the funds invested by its citizens in Cyprus banks. “it is quite possible that some of this money were obtained illegally and this may be among the key reasons why some of the Kazakhstan citizens would not want to confirm that they hold major deposits,” he said.

Bank of Cyprus. ©REUTERS

Bank of Cyprus. ©REUTERS

By Azhar Ashimova

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