Kaspi is not a traditional tech startup with hungry, disruptive founders and hard driving investors. At the heart of Kaspi is a deal among three men and a private equity fund involving billions of dollars that–despite scrutiny from the London Stock Exchange, sponsors and regulators–raises a whole host of questions.

The two most important players at Kaspi are its chairman, Vyacheslav Kim, and CEO Mikhail Lomtadze, whose respective 25% and 23% stakes are currently worth around $2 billion each. But, working alongside Moscow-based private equity fund Baring Vostok, the journey the duo took to become the largest individual shareholders of the company is filled with plot holes.

The largest of which features one Kairat Satybaldy, a former investor and the politically powerful nephew of Kazakhstan’s former president Nursultan Nazarbayev. Satybaldy claims to have walked away from Kaspi in 2018, unloading a very similar sized stake to the one now owned by Lomtadze.

In what’s described by a Kaspi spokesperson as part of a “large transaction,” Kim spent around $390 million buying Kaspi stock in 2018. Then, according to the prospectus, he transferred shares to Lomtadze that at the time were worth an estimated $500 million, in exchange for a “certain non-cash consideration” in December 2018 “pursuant to a long-standing arrangement encompassing their various business interests.”

Added to a 9.9% stake given to Lomtadze by Kim (as part of the same “arrangement”) prior to 2017–Lomtadze was granted a total stake of 31% in Kaspi.

In 2019, Lomtadze’s ownership dropped to 29%; it appears as though he may have sold part of his holding to Goldman Sachs, which acquired a 4% slice of the company that year. Lomtadze now owns 23% of the company, according to filings, worth $2.2 billion.

In a statement to Forbes, a Kaspi spokesperson confirmed the deal, which was made between Lomtadze and Kim in 2007, but said, “It’s not correct to say that Mikhail was just given his stake.”  Lomtadze “built” Kaspi, the spokesman says, adding that “it’s quite common for entrepreneurial founders to own large equity stakes in their businesses.” But Lomtadze is not a founder. He arrived at the bank that would become Kaspi as its CEO following an investment in the bank by Baring Vostok, where Lomtadze was a partner.

The spokesman for Kaspi did not explain how Kim came up with hundreds of millions of dollars to buy Kaspi shares, nor on the exact terms of the 2007 deal that made Kim and Lomtadze equal partners. Kaspi said that it couldn’t comment on Kim’s “specific financial arrangements” but added that “[t]he increase in Mikhail [Lomtadze]’s stake is due to the formalization of his partnership agreement with Vyacheslav [Kim] and not related to his annual compensation.”

Kaspi confirms that it took around 13 years—from 2007 until this year–for Kim and Lomtadze to “formalize their shareholder agreement.” It also says that because the company didn’t seek external capital or pre-IPO funding, other than an investment from Baring Vostok in 2006, there was–until now–no need to make the “agreement” formal or public.

Addressing the uncertainty about why an agreement between the pair was not made formal until “the very last moment,” Lomtadze claims in an interview conducted by a partner at PWC and published Tuesday on forbes.kz (Forbes Kazakhstan, an independent licensee of Forbes) that the two men’s relationship was one of “complete trust and chemistry.”

Kaspi Conquers Kazakhstan

Kaspi’s mobile payments and banking app is used by around half of Kazakhstan’s 18 million people—and in less than a decade, the company has helped begin weaning the country off using cash, claiming in September that daily active users of the app had increased 172% over the prior year. Kaspi says it now accounts for 68% of all electronic transactions in Kazakhstan, a payments footprint almost twice the size of all its competitors combined, including Visa and Mastercard. “People saw how easy it made their lives,” says Dr Atanu Rakshit, assistant professor of economics at Kazakhstan’s Nazarbayev University.

With close ties to Kazakhstan’s government, Kaspi has also emerged as the country’s unofficial national online bank for paying taxes and fines, assuming a role that would otherwise be filled by the civil service or a government department, and further driving new user growth across the country. It even helped distribute social benefits during the pandemic.

Revenues grew 32% to $740 million in the first half of 2020. Profits have jumped too, up 50% to $286 million, while payment transactions hit 718 million for the quarter ending September, Kaspi announced, up by 212% year-over-year, as their app quickly conquered the country during the pandemic.

Although Kaspi’s success in Kazakhstan is clear, what remains unclear is how Kaspi’s puzzling ownership changes passed muster with the powerful institutions scrutinizing Kaspi’s public listing, namely book runners Morgan Stanley, Citigroup and Renaissance Capital, the U.K.’s Financial Conduct Authority and the London Stock Exchange. The concerned parties all referred Forbes to investor relations at Kaspi.

Lomtadze, Kim And Kaspi

Kim, described in a Kaspi press release as a “mathematician and physicist by training, but an entrepreneur by calling,” found success in retail mainly through launching home electronics chain Planet Electronics, which he exited in the mid-2000’s, according to a Kaspi spokesperson, around the time Kaspi “became his principal investment.” Planet Electronics shut down in the late 2000s. Kim is also an investor and chairman of the supervisory board of supermarket group Magnum, described by a local news agency in April as the largest chain in Kazakhstan.

In 2002, Kim, who was 32 at the time, bought Kaspiyskiy—then a recently privatized bank—for an undisclosed sum. “It might have been a bit naive, but buying a bank was a big trend. Every successful entrepreneur was buying a bank, so we did too,” he was quoted as saying in a company statement in July 2019.