Fintech Duo From Once Hot U.K. IPO Lose Billions on Kazakh Riots

(Bloomberg) -- Kazakhstan’s unrest that led to an internet outage and closure of banks is hitting hard the billionaires behind fintech giant Kaspi.kz JSC.

Vyacheslav Kim and Mikheil Lomtadze, the company’s largest shareholders, have lost almost $3 billion combined this year as the London-traded stock sank a record 31% on Jan. 5 amid the chaos. The clashes led the government to declare a state of emergency, and the internet was blocked for several days. While the president has since declared victory over the uprising, shares of the online bank are still down 26% since the end of December.

The protests over fuel-price increases in central Asia’s biggest energy producer started peacefully at the beginning of the year before quickly swelling into violent clashes, accompanied by the seizure of government buildings around the country and widespread looting. Over 160 people were killed.

Embattled Kazakh President Kassym-Jomart Tokayev labeled the events “an attempted coup” and turned to Russian-led troops to help restore order after the uprising. 

As part of the emergency measures, Kazakhstan’s central bank suspended all banking operations on Jan. 6, before starting to restore them on Monday. Internet access remained sporadic across the country.  

A spokesperson for Kaspi did not respond to a request for comment. 

Kaspi operates the largest payments system in Kazakhstan and offers users a so-called superapp that lets them buy goods and travel services in addition to do e-banking transactions. Baring Vostok Capital Partners Ltd., the Moscow-based private equity fund set up by U.S. investor Michael Calvey, bought a stake in the company in 2006 and put Lomtadze in charge the following year. Goldman Sachs Group Inc. was another early investor. 

When the stock listed in London in October 2020, it was an immediate hit. The company increased the offering’s size and its global depositary receipts sold at the top end of a marketed range before they surged as much as 33% on their debut. 

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Kairat Satybaldyuly, a nephew of Kazakhstan’s first president, Nursultan Nazarbayev, owned 30% of Kaspi until 2018, when he sold his stake to Kim. Nazarbayev, 81, retained key powers in the nation after handing over the presidency to Tokayev in 2019, and his outsized influence was a focal point of this year’s clashes. 

Kim and Lomtadze currently own 24% and 23% of Kaspi, respectively. 

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