“The AFM has halted the illegal activities of the commodity exchange Modern Trading Solutions, whose management, in violation of fundamental principles of exchange trading, sold coal from the Shubarkul deposit only to those who provided illegal material rewards... Additionally, the management of Modern Trading Solutions registered 23 brokerage companies under relatives and trusted individuals, organizing activities in such a way that only those who regularly provided monetary rewards were allowed to participate in coal purchase auctions. Otherwise, entrepreneurs were excluded from the auctions through delays in accreditation, non-signing of contracts, restricted access, and cancellation of results,” the AFM statement said.
These actions by the commodity exchange led to numerous complaints and social tension ahead of the upcoming heating season. According to Kazakh legislation, the sale of coal through trading exchanges was intended to promote competition and establish fair prices without the involvement of speculative intermediaries.
“The annual criminal income of the group exceeded 2 billion tenge, which was cashed out through companies under its control. Preventive measures have been chosen against three leaders of the trading exchange — they are being held in custody, and one individual with a similar preventive measure has been declared wanted,” the AFM reported.
Other information has not been disclosed by the agency. The AFM stated that it continues to monitor the formation of prices on socially significant goods and is working to restore fair conditions for exchange transactions and protect consumer interests.
The eGov service lists only one participant registered in Almaty, Modern Trading Solutions, without revealing who it is. In the audited financial report for 2023, the only shareholder and founder of the exchange is identified as Shingis Tuyakbaev.
The exchange's equity capital amounted to 2.437 billion tenge at the end of 2023, including 2.355 billion in authorized capital and 82 million tenge in retained earnings. In 2023, the exchange earned 84.8 million tenge in profit compared to a loss of 7.2 million tenge in 2022. The exchange's revenues for 2023 totaled 160.3 million tenge, compared to 60.67 million tenge in 2022.
In March 2024, the Agency for the Protection and Development of Competition reported that the state plans to require coal enterprises to sell up to 80% of their products directly to coal terminals, from which fuel is sold to end consumers, rather than to non-productive intermediaries who inflate prices.
The AZRK noted that previously, the main producers of utility-grade coal — “Karazhyra” and “Shubarkol Komir” — annually sold up to 97% of their products to unscrupulous intermediaries, who resold the coal to final sellers — coal terminals — with an average markup of 40-45%. Such intermediary schemes for selling coal were identified by the AZRK after analyzing retail coal trade for 2022 and the first half of 2023.
To eliminate fuel resale, the government increased the coal sales norm at exchange auctions from 10% to 50% directly to coal terminals starting in 2021. Subsequently, the government planned to raise this share to 80% and adopt other measures to stabilize the price increase of utility-grade coal.