Welcome to the official website of the bankruptcy trustee
for LLC "Region-Stroy"!

EY Audit Report on Jusan Bank’s 2024 Financial Statements
On March 31, 2025, the independent auditor LLP "Ernst & Young", part of the international Big Four audit and consulting corporation EY, issued an independent auditor’s report on the separate financial statements of JSC "First Heartland Jusan Bank" (BIN 920140000084, hereinafter referred to as the Bank) for the year 2024. The report is publicly available on the Bank’s official website:
https://jusan.kz/file-server/filename?dir=documents&filename=otdel-naya-finansovaya-otchetnost-za-2024-god-s-auditorskim-otchetom-nezavisimogo-auditora-ru.pdf

Auditor’s Opinion: Compliant with IFRS
According to Ernst & Young’s opinion presented in this report, the Bank’s financial statements present a true and fair view of the Bank’s financial position as of December 31, 2024, and its financial performance for 2024, in accordance with International Financial Reporting Standards (IFRS).

The Role of Big Four Auditors and the Risk of Misstatement
For shareholders, partners, and clients, an audit by a Big Four firm is often considered the only credible source for evaluating a bank’s financial health. This is achieved through competent work in obtaining sufficient and appropriate audit evidence. However, when such evidence is lacking, the report may become misleading.

Key Fact Omitted from the Report
During the audit of Jusan Bank’s 2024 separate financial statements, LLP "Ernst & Young" failed to take into account the following material fact:
By a legally binding ruling of the Moscow Arbitrazh Court of the Russian Federation dated May 23, 2024, in case No. A40-88692/2022, in which the Bank participated, the court ordered JSC "First Heartland Jusan Bank" to pay RUB 4,415,919,084.39 to LLC "Region-Stroy".

Court Rulings Upheld
This ruling was upheld by the Moscow Arbitrazh Court of Appeal on January 15, 2025 (published on January 23, 2025), and further upheld by the Supreme Court of the Russian Federation on April 15, 2025 (Decision No. 305-ЭС25-2594).

Regulatory Requirements on Provisions
According to IFRS and the Rules on Creating Provisions adopted by the National Bank of Kazakhstan (Resolution No. 269 of December 22, 2017), Kazakhstani second-tier banks must create 100% provisions for legal obligations resulting from court rulings. The reserve amount depends on the probability of losing the case and the claim size.

Violation of Requirements and Capital Overstatement
However, this legally binding court decision was not reflected in the 2024 financial statements audited and approved by Ernst & Young. This resulted in an overstatement of the Bank's profit and capital by over USD 50 million — a material misstatement with serious consequences.

Misleading the Regulator
This situation misleads market participants and the financial regulator — the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market (ARDFM) — which is required to verify the accuracy of audited banks' profit and capital data.

Unrecognized Losses and FX Value
Thus, the 2024 financial statements audited by Ernst & Young failed to include provision expenses for the above legal obligation totaling RUB 4,415,919,084.39 or KZT 22,035,436,231.10 (based on the exchange rate of the National Bank of Kazakhstan as of December 31, 2024).

Omission in the "Subsequent Events" Section
This court dispute was also not disclosed in section 38 "Subsequent Events" of the independent auditor’s report, despite the fact that this information could have easily been found on the official Russian court website.

Legal Obligations Must Be Recognized as Provisions
According to the Bank’s accounting policy, any past event giving rise to a legal obligation requiring resource outflows must be recognized as a provision (see page 19, section 3 of the 2024 financial report audited by EY) — which was not done.

Contradiction of Audit Standards
As per law and regulatory requirements, obligations under a court ruling must be reflected in the Bank’s provisions, affecting both net profit and capital.
On page 75 of the auditor’s report, section 34 "Contingent Liabilities", it states:
"As of December 31, 2024, and 2023, the Bank's management is not aware of any material actual or pending litigation..."
— a false statement given the binding ruling already issued by that date.

Profit Overstatement by 14.2%
It is clear that Bank management deliberately withheld this information, and EY failed in its duty to detect it. As a result, the Bank’s profit was overstated by 14.2%.

Deal with V. Kim Based on Misleading Data
On June 1, 2025, based on this misleading report, ARDFM approved the acquisition of Jusan Bank shares (approx. 97%) by Kaspi Bank owner Vyacheslav Kim — a legally and regulatorily questionable transaction.

Signs of Insolvency and Bankruptcy Filing
In addition to all of the above, the existence of an outstanding debt owed by the Bank in the Russian Federation for a period exceeding three months (counted from the date of the judicial act issued by the Arbitrazh Court of the Moscow District of the Russian Federation — January 15, 2025) may lead to more serious legal consequences.
This is because, in accordance with paragraph 2 of Article 3 of the Federal Law of the Russian Federation No. 127-FZ dated October 26, 2002, “On Insolvency (Bankruptcy),” a legal entity is deemed unable to satisfy creditors’ claims in respect of monetary obligations if the respective obligations and/or duties remain unfulfilled for more than three months from the date they were due.
This is precisely what we are witnessing at present: the Arbitrazh Court of the City of Moscow of the Russian Federation is currently reviewing case No. А40-119258/2025 on the insolvency (bankruptcy) of JSC “First Heartland Jusan Bank”, initiated on the basis of a Ruling dated May 26, 2025, upon the petition of LLC “Region-Stroy”, represented by bankruptcy trustee E.V. Yurtaykina. (See court record: https://kad.arbitr.ru/Card/a6fcd68e-dfca-44a7-ab9b-191545adc643)

Legal Consequences of Bankruptcy Proceedings
The acceptance by the Arbitrazh Court of Moscow of the bankruptcy petition against JSC "First Heartland Jusan Bank" for consideration confirms the proper determination of jurisdiction in accordance with the legislation of the Russian Federation, particularly pursuant to Federal Law No. 127-FZ dated October 26, 2002 “On Insolvency (Bankruptcy).”
Once bankruptcy proceedings are initiated:

• The powers of the Bank’s executives, management bodies, and shareholders are terminated.
• The bankruptcy trustee is obligated to contest suspicious or potentially voidable transactions made by the Bank.
• The Bank's management is prohibited from making decisions on reorganization, establishing new entities or branches, paying dividends, or issuing securities.

Criminal Law Qualification of Actions
The concealment and falsification of financial statements carry criminal risks for the Bank’s leadership under Russian law, including:
- Art. 195 — Unlawful acts in bankruptcy
- Art. 196 — Intentional bankruptcy
- Art. 159 (part 4) — Large-scale fraud
- Art. 172.1 — Falsification of financial records of financial institutions

EY’s Liability and Breach of Standards
Auditors bear responsibility under international standards and national law. Failure to disclose material legal liabilities may trigger civil and criminal consequences.
Applicable Standards:
- ISA 240, 700, 705
- IFAC Code of Ethics
Kazakhstan Regulations:
- Law on Auditing
- Law on Accounting and Financial Reporting
- Civil and Criminal Codes of Kazakhstan
- Law on Banks and Banking Activities

Conclusion:
Jusan Bank failed to disclose significant legal obligations. EY failed to exercise due diligence. ARDFM approved a transaction based on a misleading report. Violations of international and Kazakh financial regulations are evident. Investors on NASDAQ and Kaspi Bank clients may face a trust crisis.

— Jusan Bank Must Repay Its $55 Million Debt to Region Stroy LLC

Dinmukhamed Tabyldy — Business Consultant, Representative of the Bankruptcy Trustee of "Region Stroy" LLC

Question: Mr. Tabyldy, why are you publicly raising the issue of Jusan Bank’s debt to your company at this time?

Because this is not just a commercial matter — it’s a matter of principle.
“Region Stroy” LLC is a legitimate creditor. The debt of $55 million is legally confirmed by all judicial instances, including the Supreme Court of the Russian Federation. The rights to this claim were lawfully assigned, and the obligation remains outstanding to this day.

We have made many efforts over a long period to resolve the matter through constructive dialogue. However, no clear strategy for settling the debt has ever been presented. Now, with information emerging about a potential sale of Jusan Bank, we believe it is our duty to notify the financial regulator and transaction participants: obligations must be honored.

Let me emphasize — this is not a pressure campaign or an exposé. This is an appeal to legality, fairness, and common sense. We are relying solely on indisputable facts and legal documents. Jusan Bank’s actions have left us no choice but to bring this financial dispute into the public domain.

Where did this debt originate, and why do you believe Jusan Bank is obligated to pay it?

This debt is a direct result of legal succession. In the course of restructurings and mergers — including the transfer of assets from Tsesna Bank — Jusan Bank became the legal successor of several obligations, including those owed to our company.

“Region Stroy” LLC financed large-scale infrastructure and construction projects. All obligations from the banks were properly documented. The existence of this debt has been repeatedly confirmed and has not been disputed by any party in the chain of succession.

Today, under both law and fact, Jusan Bank is the debtor. We are speaking publicly about this because it reflects on the reputation of the entire financial system of Kazakhstan.

The management of Jusan Bank consists of highly qualified professionals. How could they let one of the country's largest financial institutions get to the point of potential bankruptcy?

Indeed, Jusan Bank is managed by professionals of the highest caliber. And that only deepens our confusion: how could such a situation have been allowed to arise?

Take, for instance, Mr. Kuat Kozhakhmetov, Chairman of the Board of Directors. He has had a truly distinguished career:

• From Senior Economist at the National Bank of Kazakhstan to Deputy Chairman,
• Leadership positions at Tsesna Bank, the Financial Supervision Committee — which is symbolic in our case — as well as Samruk-Kazyna Fund and AIFC,
• A degree from the University of Chicago Booth School of Business, membership in the UK Institute of Directors (IoD), and the Chartered Director qualification.

Or Ms. Gulmira Dzhumadillayeva, the current Chairwoman of the Management Board, with 25 years of experience in banking — nearly 20 of them in top executive roles. Before Jusan, she served as Deputy Chairwoman of the Management Board at Kaspi Bank. She is a strong leader.

And with all this experience and expertise — it remains unclear how a claim with established legal validity has not yet been addressed. Perhaps the information about this debt has not been fully communicated to them, or was misinterpreted. In any case, we remain open to dialogue and expect the debt to be paid in full without further delay.

Why do you believe potential buyers of Jusan Bank are being misled?

Let’s be precise: we are not claiming that anyone is deliberately concealing information. But if a deal to sell the bank is being negotiated or prepared without mentioning this substantial debt, then a buyer is indeed at risk of “buying a pig in a poke.”
Take Mr. Vyacheslav Kim, for example — a respected investor, shareholder of KASPI, and a prominent entrepreneur with an impressive business reputation. I have deep respect for his track record. And that’s exactly why I feel compelled to raise this issue: the bank has a substantial obligation that must be resolved before any major transaction.
From a business ethics standpoint, we are obliged to be transparent. I am confident Mr. Kim values transparency and would not wish to be part of a transaction that could result in reputational or legal consequences due to unresolved debt.

What are your demands to Jusan Bank?

Our demands are absolutely reasonable and justified: to repay the $55 million debt without further delay.
We are not asking for more than what is rightfully owed. We are not creating unnecessary noise. We are simply insisting that the bank fulfill its obligations.
This is not just a commercial issue — it is a test of the maturity of Kazakhstan’s financial system. You cannot build a functional capital market if obligations are not respected. Especially when systemic banks are involved.

What actions will you take if the situation is not resolved?

We reserve the right to act within the legal framework, including through international arbitration forums. But we still hope that reason and professionalism will prevail.
We do not seek litigation or disruption, nor do we want the bank to go bankrupt. We seek justice. That is the core of business ethics.
I speak, as the representative of the insolvency administrator of “Region Stroy” LLC, not only to the leadership of Jusan Bank, but also to all potential investors, buyers, and the public:
We seek a constructive and prompt resolution of a commercial dispute between two market entities, based on a judicial ruling. We are speaking about a specific, documented $55 million debt.
We respect the professionalism of Jusan Bank’s management, but believe this situation requires immediate resolution.
We are ready for open dialogue. But we are not ready to turn a blind eye to the obvious.

Editor’s Note:
All facts presented in this interview are based on public records, legal documents, and years of correspondence between the parties. “Region Stroy” LLC maintains a constructive stance. Representatives of Jusan Bank, potential investors, or any interested parties may reach out for clarifications or initiate negotiations at any time.

1. Background: Statement by Ernst & Young on March 31, 2025

On March 31, 2025, the international audit firm Ernst & Young (EY) released the audit of First Heartland Jusan Bank JSCs financial statements for the year 2024, confirming compliance with International Financial Reporting Standards (IFRS). The report included no provisions for legal risks, and the banks financial condition was described as stable.

2. Concealed Liability: Lawsuit for RUB 4.4 Billion

On May 23, 2024, the Moscow Arbitrazh Court ruled in favor of LLC "RegionStroy" against Jusan Bank for RUB 4,415,919,084.39 (~KZT 22 billion) in case No. 40-88692/2022. The ruling became final on January 15, 2025, and was upheld by the Supreme Court of the Russian Federation on April 15, 2025.

Under IFRS 37 and National Bank of Kazakhstan regulations, the bank was obligated to create a 100% reserve for this amount which it failed to do.

3. Financial Distortion Effects

The failure to reserve led to:

• Overstated profit by 14.2%;
• Artificial capital increase of over USD 50 million;
• Misleading the regulator the Agency for Regulation and Development of the Financial Market (ARDFM).

4. Share Sale and Pre-Bankruptcy Condition

On June 1, 2025, ARDFM approved the acquisition of Jusan Bank shares by businessman V. Kim, owner of Kaspi.kz, without factoring in the court ruling. Meanwhile, the bank had failed to comply with the court decision for over three months since January 15, 2025 a condition that may qualify as insolvency under Russian law and international standards

5. Bankruptcy Proceedings Initiated

On June 3, 2025, the Moscow Arbitrazh Court accepted a bankruptcy petition against Jusan Bank, filed by RegionStroy (see Russia wants to bankrupt Jusan Bank on Newsline.kz). The process will place the bank under receivership, suspend its management, and may challenge past transactions including the share sale

6. Lessons for Regulators and the Market

• Response from Ernst & Young: In recent years, EY has been involved in multiple scandals (e.g., Wirecard, Luckin Coffee). A common critique is the underallocation of audit resources in favor of consulting revenue.
• ARDFM Oversight: The regulator allowed public transactions based on questionable financial reports. One must ask how were liabilities verified?
• Managements Role: Concealing reserves and obligations is a clear sign of deliberate misrepresentation of financial statements.

7. Conclusion: Systemic Issues Identified


Recommendations to Kazakhstans Financial Regulator:

1. Request formal explanations from EY and Jusan Banks management;
2. Conduct an independent audit with international oversight;
3. ARDFM must reassess the share transaction and expose all related risks.

Final Note:
The stability of the financial system demands strict compliance with standards — both by auditors and
regulators. The spillover of risks through international transactions significantly undermines investor trust.

AUDIT MANIPULATIONS AND DEBT CONCEALMENT LEAD JUSAN BANK TO BANKRUPTCY PROCEEDINGS IN RUSSIA

Almaty / Moscow – June 17, 2025. One of Kazakhstan’s largest banks, First Heartland Jusan Bank JSC, has found itself at the heart of an international financial scandal. According to official data from the Moscow Arbitrazh Court and an audit report by Ernst & Young (EY), the bank concealed obligations exceeding RUB 4.4 billion (approx. KZT 22 billion) from regulators and investors. This concealment undermined the reliability of its annual financial statements and effectively led to bankruptcy proceedings in the Russian Federation.
https://kad.arbitr.ru/Document/Pdf/ac206c03-bb7a-4954-91ea-c50409cfb9a3/419cd4c9-1d81-4cb2-b610-a70b04e7977f/A40-88692-2022_20240523_Opredelenie.pdf?isAddStamp=True

Violation of Standards and Concealment of Information: What Happened?

Despite a 2024 court ruling in Moscow ordering Jusan Bank to pay RUB 4.4 billion to a Russian claimant, this liability was not reflected in the bank’s 2024 financial statements.

The international auditor Ernst & Young, which certified the statements on March 31, 2025, failed to mention the litigation in the “Subsequent Events” section, breaching International Financial Reporting Standards (IFRS) and International Auditing Standards.

“The Bank's management is not aware of any material legal proceedings,” – EY report, p. 75.

At the time of publication, the court ruling was already legally binding.
https://alataucitybank.kz/file-server/filename?dir=documents&filename=otdel-naya-finansovaya-otchetnost-za-2024-god-s-auditorskim-otchetom-nezavisimogo-auditora-ru.pdf

Domino Effect: False Reporting, Inflated Profits, Share Transactions

By concealing the court-ordered liability, Jusan Bank:

• Overstated its net profit for 2024 by 14.2%;
• Artificially inflated capital by over USD 50 million;
• Created a positive image before the Agency for Regulation and Development of the Financial Market of Kazakhstan (ARDFM), which approved the acquisition of nearly 100% of the bank's shares by entrepreneur Vyacheslav Kim, founder of Kaspi.kz, on June 1, 2025.

At the time of the transaction, Jusan Bank was already in default under the court ruling, making it legally impossible to transfer shares without the consent of Russian creditors and proper legal due diligence.

May 26, 2025: Bankruptcy Proceedings Initiated in Russia

The winning claimant, LLC “Region-Stroy,” filed a bankruptcy petition against Jusan Bank in Russia. The Moscow Arbitrazh Court accepted the case. Under Russian law:

• Supervision and insolvency proceedings are initiated;
• The bank's management is removed from control;
• Transactions made up to three years prior (including the share purchase) may be contested;
• The bank loses the right to issue securities, pay dividends, or undergo restructuring.

https://kad.arbitr.ru/Document/Pdf/a6fcd68e-dfca-44a7-ab9b-191545adc643/f1a9ca5b-b931-45b2-821b-7fe561e40f16/A40-119258-2025_20250526_Opredelenie.pdf?isAddStamp=True

Legal Implications: Signs of Criminal Offense

Under Russian law, the actions of the bank’s management and its auditor show signs of criminal offenses, including:

• Intentional bankruptcy (Art. 196, Criminal Code of the Russian Federation);
• Falsification of financial documents (Art. 172.1);
• Large-scale fraud (Art. 159, Part 4);
• Illegal actions during bankruptcy (Art. 195).

This situation may lead to:

• Criminal proceedings against Jusan Bank’s top management and EY auditors;
• Revocation of the bank’s license in Kazakhstan under the Minsk Convention recognizing Russian court decisions;
• Potential international asset freezes.

Regulator Under Pressure: Questions About ARDFM’s Role

As of this press release, ARDFM has:

• Not acknowledged any misstatement in the financial report;
• Not suspended the share transaction;
• Not warned depositors of the potential risk;
• Not initiated an unscheduled inspection of the bank and auditor.

“We expect full and prompt settlement of Jusan Bank’s obligations to LLC ‘Region-Stroy,’ as well as the correction of Ernst & Young’s audit report in accordance with international standards. Our goal is not the bankruptcy of one of Kazakhstan’s largest banks, but the restoration of transparency, trust, and legal compliance,” emphasized Dinmukhamed Tabyldy, business consultant and official representative of LLC “Region-Stroy” in Kazakhstan.

Expected Consequences

Experts in banking and law anticipate:

• Downgrades in Jusan Bank’s credit ratings by international agencies;
• Erosion of confidence in Kazakhstan’s financial regulatory institutions;
• Potential international investigation due to Kaspi’s listing on NASDAQ.

Failure by Jusan Bank to repay its USD 55 million debt to LLC “Region-Stroy” may lead to severe legal, financial, and reputational consequences — including bankruptcy proceedings, loss of investor and regulatory confidence, and possible criminal liability of executives.

Press Contact

Official Representative of the Insolvency Administrator of LLC “Region-Stroy”
Business Consultant
Dinmukhamed Tabyldy
Tabyldy1@gmail.com

Almaty, Kazakhstan, June 15, 2025

The acquisition of nearly 100% of First Heartland Jýsan Bank by Kazakh billionaire Vyacheslav Kim is now in serious jeopardy. The investigation, intensified by rulings from Russian courts, uncovered large-scale violations, including concealment of debt totaling over 4.4 billion rubles (approximately $55 million), which has led to bankruptcy proceedings against Jusan Bank in Russia.

Court Ruling and Writ of Execution: A Legal Bombshell for the Deal

On June 12, 2025, the Specialized Economic Court of Almaty granted the motion of LLC “Region-Stroy” to enforce the decision of the Moscow Arbitrazh Court. According to the ruling, effective since January, Jusan Bank, Irina Nikishina, and Nurlan Mukhamedzhanov have been held subsidiarily liable for the amount of 4,415,919,084.39 rubles.

This not only mandates immediate enforcement of the debt collection but also imposes a ban on any corporate actions, including share transfers, without the consent of Russian creditors.

Kaspi and Vyacheslav Kim at Risk of Sanctions Blowback

The business community is closely watching the deal, which had previously been approved by the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market (ARDFM) on June 1, 2025. Experts note: if the bank was in a de facto state of bankruptcy, any actions related to the share transfer without proper legal due diligence would be legally void.

Moreover, the transaction involves the publicly traded company Kaspi.kz, whose shares are listed on NASDAQ. This automatically opens the door for international regulatory involvement and investigation by the U.S. Securities and Exchange Commission (SEC).

EY Under Fire: Omission of Legal Liabilities Deemed IFRS Violation

Particular attention is being drawn to the role of international audit firm Ernst & Young, which signed off on Jusan Bank’s annual report on March 31, 2025, without mentioning the court ruling that had become legally binding back in January.
“The Bank’s management is not aware of any significant legal proceedings,” states page 75 of EY’s report.

However, at the time of publication, the bank had already been officially held liable, and bankruptcy proceedings in Russia had been initiated.

Legal Frontline: Criminal Prospects and International Ramifications

Lawyers and crisis managers warn that the actions of Jusan Bank’s management and EY may contain elements of criminal offenses, including:

• Deliberate bankruptcy (Art. 196 of the Criminal Code of the Russian Federation),
• Falsification of financial statements (Art. 172.1 of the Criminal Code),
• Large-scale fraud (Part 4, Art. 159 of the Criminal Code),
• Unlawful acts during bankruptcy (Art. 195 of the Criminal Code).

Potential consequences include:

• International arrest of Jusan Bank’s assets;
• Suspension or cancellation of the acquisition deal;
• Criminal prosecution of involved parties;
• Revocation of Jusan Bank’s license in Kazakhstan under the Minsk Convention;
• A catastrophic decline in trust towards ARDFM and the national financial system.

Plaintiff’s Statement:

“Our goal is to restore legality. We expect enforcement of the court decision and a review of EY’s audit opinion,” said Dinmukhamed Tabyldy, business consultant and official representative of LLC “Region-Stroy” in Kazakhstan.

Key Takeaway: The Deal of the Century May Become the Case of the Year

While the Kazakh financial regulator remains silent, both domestic and international audiences are demanding answers:

• Why was the deal approved despite the existing court decision?
• Why didn’t ARDFM initiate an investigation?
• Where is EY’s accountability?

If Jusan Bank fails to meet its $55 million obligation soon, the consequences may be irreversible—ranging from license revocation to an international scandal that could damage the reputations of major banks and the overall investment climate in Kazakhstan.

Contact for Media Inquiries:

Dinmukhamed Tabyldy
Official Representative of LLC “Region-Stroy”
Tabyldy1@gmail.com

One of the most serious crises of trust in recent years is brewing in Kazakhstan's financial sector.

Against the backdrop of financial statements assured by the largest international auditor Ernst & Young, "First Heartland Jusan Bank" JSC – the third largest bank in the country – has become involved in bankruptcy proceedings in the Russian Federation and is suspected of concealing a significant judicial obligation totaling over 4.4 billion rubles (≈22 billion tenge).

Jusan Bank's official financial statements for 2024, confirmed by "Big Four" auditors, did not reflect a legally binding decision of a Russian court. This has called into question the correctness of key financial indicators, including profit and capital, and became the basis for approving the deal to sell 97% of the bank's shares to entrepreneur Vyacheslav Kim – one of the beneficiaries of Kaspi.kz, whose shares are traded on NASDAQ.

The actual non-execution of the court decision, the absence of provisions in the financial statements, and the distortion of information in the EY audit report have become subjects of criticism from the financial community. Moreover, the actions of the bank's management and the auditor may fall under the qualification of premeditated bankruptcy, document falsification, and large-scale fraud.

This article provides a detailed analysis of the key stages of the situation's development: from the audit report and court decisions to the initiation of bankruptcy proceedings and possible criminal legal consequences.

Special attention is paid to the role of the regulator – the Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan, which, despite publicly available risks, did not take preventive measures.

This is not just about the fate of one bank – confidence in the Kazakh financial system, transparency of supervision, and the reputation of international auditing practices are at stake.

I. Ernst & Young's Audit Report: "All Clear"

Date: March 31, 2025
The international audit company "Ernst & Young" LLP, part of the "Big Four," presented an independent audit report on the separate financial statements of "First Heartland Jusan Bank" JSC for 2024. It stated that the bank was in a stable financial position, complying with International Financial Reporting Standards (IFRS).

However, as it later turned out, this report did not reflect one of the most critically significant court claims against the bank, which casts doubt on the reliability of all information.

II. Court Decision in Russia: Over 4.4 Billion Rubles to be Recovered from Jusan Bank

Date: May 23, 2024 – April 15, 2025
The Arbitrazh Court of the city of Moscow issued a decision to recover 4,415,919,084.39 Russian rubles from Jusan Bank in favor of "Region-Stroy" LLC. This decision entered into legal force and was confirmed by all judicial instances up to the Supreme Court of the Russian Federation.

According to the legislation of the Republic of Kazakhstan and IFRS 37, the bank was obliged to recognize these obligations as unconditional and reflect a corresponding reserve (100% of the claim amount) in its statements. But this was not done.

III. Violation of Standards and Legislation

Despite the bank's participation in the debt legal proceedings, the audited financial statements did not reflect the amount of reserves exceeding 22 billion tenge. Moreover, Section 38 "Events after the reporting date" does not even mention the case itself, which directly contradicts the standards of conscientious auditing.

Page 75 of the audit report contains false information: "The Bank's management has no information about significant litigation." This is despite the fact that the obligation had already been recognized by a court of the Russian Federation.

IV. Financial Statements Were Overstated

As a result of concealing the debt:

• Jusan Bank's profit for 2024 was overstated by 14.2%.
• Capital was artificially increased by more than 50 million US dollars.
• This affected indicators used in regulatory checks and investment decisions.

V. Approval of Kaspi Deal Based on False Information

Date: June 1, 2025
Based on unreliable financial statements, ARRFD (Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan) approves the deal for the purchase of Jusan Bank shares by entrepreneur Vyacheslav Kim (presumably 97% of shares).

However, at the time of the deal's approval, Jusan Bank was de facto already in a state of non-performance of obligations under the decision of the Russian Federation court for more than three months.

VI. Bankruptcy: Jusan Bank Under Insolvency Procedure in the Russian Federation

Date: May 26, 2025
The Arbitration Court of the city of Moscow accepted for proceedings case No. A40-119258/2025 on recognizing Jusan Bank as bankrupt at the application of "Region-Stroy" LLC.

This means:

• Introduction of bankruptcy proceedings;
• Removal of management from control;
• Possible challenging of all suspicious transactions, including the sale of shares;
• Legal restrictions: prohibition on reorganization, bond issuance, dividend payments, etc.

VII. Criminal Legal Consequences: Falsification of Financial Statements and Signs of Premeditated Bankruptcy

Based on open documents and norms of the legislation of the Russian Federation, the actions of Jusan Bank's management may fall under the following articles of the Criminal Code of the Russian Federation:

• Art. 195 – illegal actions in bankruptcy;
• Art. 196 – premeditated bankruptcy;
• Art. 159 Part 4 – large-scale fraud;
• Art. 172.1 – falsification of financial documents of a financial organization.

VIII. Auditor's Responsibility: Ernst & Young Under Fire

Ernst & Young, the company that signed the audit report, risks facing consequences:

• Civil and criminal liability for dishonest auditing;
• Violation of ISA 240, 700, 705 standards and the IFAC Code of Ethics;
• Loss of trust from the regulator and clients in the Kazakh market.

IX. Questions to the Regulator: ARRFD Ignored Signs of Violation

ARRFD, as a financial regulator and a special authorized state body:

• Did not identify the unreliability of the financial statements;
• Approved the sale and purchase of shares, despite potential bankruptcy;
• Has not yet publicly commented on the fact of the initiation of insolvency proceedings.

According to Dinmukhamed Tabyldy, business consultant and official representative of "Region-Stroy" LLC in Kazakhstan, the company is not interested in Jusan Bank's bankruptcy.

"Our position is principled and constructive: we expect prompt execution of the legally binding court decision on debt repayment to "Region-Stroy" LLC in the amount of 55 million US dollars. This will allow the bank to avoid large-scale legal, financial, and reputational consequences that it has effectively created by its own actions, evading the fulfillment of obligations," he noted.

Thus, Jusan Bank has found itself at the epicenter of a potential financial and legal scandal.

Against the backdrop of initiated proceedings for possible bankruptcy in a Russian Federation court, violations in the audit report, and the deal's approval by the regulator without proper verification – the situation requires an urgent response from the state bodies of Kazakhstan.

The market and depositors must receive complete and reliable information. Questions are not only for Jusan's management, but also for Ernst & Young, and the regulator itself.