Kazakh president says arrest of sovereign wealth fund chief will not disrupt its operations

Kazakh President Kassym-Jomart Tokayev said on Friday the arrest ​of the head of the country's sovereign ​wealth fund on suspicion of corruption would ‌not ​disrupt the fund's operations and that anti-corruption efforts should boost investor confidence. On Thursday, Kazakhstan's domestic security service said Nurlan Zhakupov, the CEO of the ‌Samruk-Kazyna sovereign wealth fund, and Yelzhas Otynshiyev, the head of the state railway company Kazakhstan Temir Zholy (KTZ), which is wholly owned by Samruk-Kazyna, had both been arrested on suspicion of corruption.

Samruk-Kazyna said on Thursday it was cooperating with ‌the investigation. Reuters could not reach the two executives for comment. "I am sure that the fight against ‌corruption, on the contrary, should increase the confidence of investors and creditors in this institution, and its work will become more effective, transparent and productive," Tokayev said at a session of the country's security council.

Samruk-Kazyna owns assets accounting for almost 40% of Kazakhstan's GDP. ⁠Among ​them are the national ⁠carrier Air Astana and the state oil and gas company KazMunayGaz . Earlier this week, KTZ cleared a listing hearing at the Hong Kong ⁠Stock Exchange, a key step toward a planned initial public offering with listings in Astana, Hong Kong and London.

CONTRACTS ​REVIEWED In his speech, Tokayev also said Kazakhstan had reviewed some contracts, though he did not ⁠say in which industries or with whom.

He said: "Recently, we reviewed some agreements and contracts, which, in my opinion, were signed by mistake." He ⁠did ​not say whether he was referring to the energy sector, where Kazakhstan has challenged several major foreign-led projects.

Kazakhstan, which accounts for about 2% of global oil supply, has accused oil companies that entered the ⁠country in the 1990s, under contracts signed during the rule of then-President Nursultan Nazarbayev, of corruption and environmental violations ⁠and is pursuing arbitration ⁠against them. In January, Kazakhstan won an arbitration case against the consortium of oil majors that operates the Karachaganak field. It is in arbitration proceedings over alleged environmental violations ‌at the offshore ‌Kashagan field.