Kazakhstan effectively nationalised its top bank BTA and sacked an ex-opposition leader as its key manager on Monday as a deepening financial crisis acquired political undertones in Central Asia's biggest economy. The government said it will buy 78.14 percent of shares in BTA, which has assets of $31 billion, to boost its capital by more than $2 billion.
Separately the government said it was looking to rescue No 4 bank Alliance Bank by buying 76 percent of the shares from its key shareholder for a symbolic sum of less than $1 and deposit $200 million into its accounts to boost liquidity. Injecting political spin into the shake-up, the state financial regulator dismissed Mukhtar Ablyazov, BTA chairman and a former opposition leader, as part of the take-over.
Ablyazov, a founding father of a local opposition party who was briefly jailed in 2002, lashed out at the authorities after the move, accusing the state of "corporate raiding." "Today's actions by the government against BTA represent abuse of power and corporate raiding," Ablyazov, who has no direct interest in BTA and denied being a shareholder, said in a statement whose authenticity was confirmed by BTA.
Like most local banks, BTA has been grappling to survive in tighter credit conditions after the global crunch ended oil-producing Kazakhstan's double-digit economic growth and crippled its once-vibrant banking industry. A looming recession is now a worry to President Nursultan Nazarbayev who, while being criticised in the West for brooking no dissent, has been popular at home due to rising incomes.