Financial police raid Kazakh bank CenterCredit

April 27. Reuters. ALMATY

By Masha Gordeyeva

* Bank denies any wrongdoing
* Checks follow anonymous letter

Financial police raid Kazakh bank CenterCreditKazakh financial police have raided the office of CenterCredit, the country’s fourth-largest lender part-owned by South Korea’s Kookmin, the bank said on Tuesday, denying any wrongdoing.

CenterCredit said the financial police were checking its documents after an anonymous letter accused the bank of “violating credit policies”.

“All the accusations have no grounds and we are sure we are right, so our customers need not worry,” a spokeswoman for CenterCredit quoted Chief Executive Vladislav Lee as saying.

Kazakhstan last year accused former managers of two large banks, BTA and Alliance, of fraud that led to billions of dollars in losses.

Milena Ivanova-Venturini, an analyst at Renaissance Capital, said in a note she did not believe CenterCredit had “funny business” along the lines of BTA and Alliance and pointed out it had over $1 billion on accounts with central bank.

“We also note that the inspection from the financial police is taking place based on an anonymous letter – which actually runs against the legal requirements that normally allow for interference and investigation from the financial police – hence the management itself is somewhat puzzled and surprised by the scale of investigation,” she wrote.

“Of course the market risk in Kazakhstan is what it is and one never knows what is behind such actions. However, at this juncture we are not particularly worried and think this may turn into a good buying opportunity.”

Kookmin, a unit of KB Financial Group, owns a 42 percent stake in CenterCredit while the International Finance Corporation, the private sector arm of the World Bank, holds 10 percent.