Freedom Holding CEO on market manipulation allegations and future plans

14.12.2023, 15:54 exclusive.kz

Freedom Holding is holding its own investigation into allegations of insider stock moves and dealings with sanctioned Russian individuals, the company’s CEO Timur Turlov said.

The fintech company’s operations in the US are directly supervised by US regulators “which is a good thing for us because it allows all our activities to be monitored and checked”, Turlov told reporters in Almaty.

He said the Holding has not received any questions from US regulators since May.

“So far there are no grounds to suggest that the US regulators want to raise any issues with us,” Turlov said.

He added that the company has hired an independent US law firm to conduct an investigation into the allegations that were published by Hindenburg Research in August.

Hindenburg said its research had found «hallmark signs of fake revenue» and market manipulation in both the company’s investments and stock, and evidence that it «brazenly skirts sanctions».

Turlov also told reporters that Freedom Holding has pulled out of a deal to buy the US Maxim Group investment bank because of the continued slump on the US securities market.

“I have the feeling that even though the dot com crisis of the 2000s was more prominent and deeper, the recovery was quite fast. Now [after the latest market slowdown], some segments of the US market have not bounced back yet, and many ‘stars’ of 2020-2021 are now worth 70-80 percent less than then,” he said.

Turlov said Freedom Holding is not planning to leave the US market, “we are simply not planning to buy any major assets and focusing on organic growth”.

Meanwhile, Freedom Holding intends to turn its attention to Kazakhstan.

“We can see unfulfilled demand on the internal market – there is a need to upscale our business here, we understand that very well, we simply need to invest a bit,” he said.

Trulov noted that there is a high level of investment activity in Kazakhstan, even if the conditions are not perfect: on the one hand there are significant government incentives, on the other a “tough” monetary situation, with the base rate being almost 6 percent higher than inflation.

“There is a strong feeling that Kazakhstan is not a bad place for investment at the moment, and judging by the high level of investment activity I am not the only one who thinks so,” Turlov said.

“If the monetary factors get synchronised, there are grounds to suggest that in 2024 the base rate will be lower than in the past year and a half. It should give a good impetus to business. Because corporate borrowing has been at record low levels … and they need increasing.”

Among the “many opportunities” that he sees in Kazakhstan, Turlov named diversification of the telecoms market, saying Freedom Holding has investment ideas that could bring “fast” returns.

Freedom Holding is also working on a “super App”, which might be rolled out in the middle of next year, by which time the National Bank is expected to introduce money transfers between banks through clients’ phone numbers.

“We hope that by that time we will be able to release our ‘superApp’ and become a serious competitor in the sector of retail payments,” Turlov said.

Freedom Holding is also considering buying a bank in Tajikistan as money transfers between Central Asian countries are on the rise.

Turlov is No 5 on the Forbes Kazakhstan list of the country’s wealthiest businesspeople.

By Olga Tyatina

Photo by Valeriy Ayapov