Kazakh Audit Shows State Failures in BTA Bank’s Takeover

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BTA Bank (BTA) exercised insufficient control and arranged payments to creditors in violation of a moratorium during its debt restructuring two years ago, according to a Kazakh government audit obtained by Bloomberg. The inspection, completed in February, found that the Almaty-based lender was breaching national legislation and bank regulations, a sign of an “inadequate level of control” on the part of BTA executives, the central bank’s financial oversight committee said in the document. The bank also arranged repayments that bypassed BTA itself, the regulator said. In violation of a plan approved in September 2010, BTA failed to create a development strategy for 2011 through 2015, according to the audit. The audit suggests bungled oversight by the state-appointed bank officials and their failure to steady BTA (BTAS), which has blamed its previous management for the implosion that preceded the government takeover three years ago. BTA’s international creditors had their investments slashed by almost 56 percent after the biggest Kazakh lender at the time defaulted on $12 billion of debt in 2009. BTA, which also failed to make an interest payment on its July 2018 dollar bonds in January, said on Oct. 3 it reached a non-binding agreement with creditors on restructuring $11.2 billion of liabilities. The bank won 92 percent creditor approval for a restructuring plan in May 2010 paying cash and issuing new debt. Read more.