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Is Conflict With The President The End Of The Line For Kyrgyzstan's Vodka King?

Sharshenbek Abdykerimov appears to have fallen out of favor in the current political climate.
Sharshenbek Abdykerimov appears to have fallen out of favor in the current political climate.

For much of the last 20 years, Kyrgyz alcohol magnate Sharshenbek Abdykerimov was known to many as "a wallet," a term used to describe a wealthy figure who finances political activity to help secure power and better treatment.

As the founder of the Ayu Holding company -- whose revenue is partly derived from producing vodka and other spirits -- he reportedly had the ear of several Kyrgyz presidents and may have benefited from legislation that helped his company corner the local market.

But under President Sadyr Japarov, Abdykerimov's wallet does not appear to carry the same weight.

And after what Japarov himself called the confiscation by the authorities of two of the businessman's most important assets, Abdykerimov's seat in the backroom of Kyrgyz politics looks -- at a minimum -- to be under threat.

But if the rise of Abdykerimov tells a story about where Kyrgyzstan has been, does his apparent fall offer any indication of where the country is heading?

"Abdykerimov, like other oligarchs in Kyrgyzstan, unfortunately played a huge role in corrupting politics," explained Leila Nazgul Seiitbek, a lawyer and chairwoman of the NGO Freedom for Eurasia.

"And it led to a natural outcome," she said, calling the company's problems and "similar situations around other medium and large businesses" part of a "new phase" in the regime of Japarov and the national security chief often viewed as his equal in power, Kamchybek Tashiev.

Kamchybek Tashiev (left) and Sadyr Japarov
Kamchybek Tashiev (left) and Sadyr Japarov

We Can't Be Bought By Ayu!

Since springing to the presidency from a prison cell during a political standoff in 2020, Japarov has regularly used interviews with the state media outlet Kabar to clear the air around political controversies and counter criticism from his opponents.

He sent a chill through the country's business community last month when he described to Kabar how the state had nationalized Ayu's vodka distillery and ethyl-alcohol production facility, claiming that a raid had unearthed systematic tax evasion within the company.

"We told them that the days when the company could buy off the government were in the past, and that they should no longer count on it.... But they didn't hear us," Japarov said, before adding, "From now on, both ethyl alcohol and vodka will be produced by the state."

The government has since moved away from any characterization of the move as a seizure. Economy Minister Daniyar Amangeldiev told RFE/RL's Kyrgyz Service in an interview that the company had willingly handed over its assets without "any sort of pressure from the government." Japarov's office also characterized the takeover of the two factories as "voluntary" when he was asked by RFE/RL.

The office spokesman did not respond to a question about whether there was still an active criminal case against Ayu, as was announced on April 14, the day of Japarov's interview.

Kyrgyz business analysts have expressed skepticism about the idea of a voluntary handover.

Azamat Akeneev told RFE/RL that it seemed highly unlikely that Ayu Holding, a company not known for its charity, would have considered such a move, and said the high profile of the company set off another red flag for investors watching Kyrgyzstan.

"Ayu is widely known not only to entrepreneurs, but also to the general public. This is one of our largest taxpayers, which employs tens of thousands of employees," he said.

RFE/RL attempted without success to contact Abdykerimov and Ayu via their representatives.

The independent media outlet Kaktus reported last month that Abdykerimov is currently receiving treatment abroad for a liver problem.

All The Presidents' Man?

The Ayu Holding company was founded in 2003 and quickly rose to become a powerful player in the local vodka market.

In 2009, during the presidency of Kurmanbek Bakiev, the company's hand was seen behind a law mandating that all vodka producers should produce no less than 10,000 liters of vodka annually or face losing their license.

In the coming years, many of Ayu's smaller competitors duly exited the market.

Bakiev's overthrow in 2010 gave rise to a new, mixed political system under which the powers of the prime minister and the president were more evenly balanced than before.

Abdykerimov initially backed the wrong horse, joining the Respublika party headed by Kyrgyzstan's prime minister-in-waiting, Omurbek Babanov.

When Babanov became embroiled in a conflict with President Almazbek Atambaev, Abdykerimov was one of several lawmakers in Respublika whose businesses reportedly came under pressure from the anti-corruption arm of Kyrgyzstan's State Committee for National Security -- an organ under presidential control.

Sharshenbek Abdykerimov backed Omurbek Babanov (left) over President Almazbek Atambaev (right), before he realized his mistake.
Sharshenbek Abdykerimov backed Omurbek Babanov (left) over President Almazbek Atambaev (right), before he realized his mistake.

But the now-familiar accusations of Ayu producing counterfeit alcohol evaporated as soon as Abdykerimov and several other businessmen abandoned Babanov's party, later forming a new one called Kyrgyzstan.

Medet Tiulegenov, a Bishkek-based political scientist, told RFE/RL that the Kyrgyzstan party fit the definition of a "satellite party," bolstering Atambaev's favored Social Democratic Party at the expense of popular opposition politicians.

"Abdykerimov's role was seemingly in financing the activities of this party," Tiulegenov said of the businessman, who became the head of the National Olympic Committee in 2015, the first year the Kyrgyzstan party entered the legislature.

But things fell apart for Abdykerimov's party after the October 2020 vote, when it was one of three factions comfortably crossing the threshold to take parliamentary seats. The election has been described by some as the most flagrant and systematic case of vote-buying in Kyrgyzstan's rich political history, and the losing parties subsequently revolted.

But the eventual annulment of the election results failed to calm the crisis, and amid the meltdown, Japarov was released from the prison where he was serving time for hostage-taking -- a sentence he has always described as motivated by his political opposition.

Less than two weeks later, the populist Japarov had replaced Sooronbai Jeenbekov as the country's ruler, confirming his ascent in a presidential election months later.

Shadow Games

As Japarov and his partner, Tashiev, consolidated power, a number of high-profile politicians were arrested. The arrests were typically connected with an investigation into activities at the Kumtor gold mine that authorities eventually seized control of in 2021.

One of the men detained was Almazbek Batyrbekov, a close ally of Abdykerimov's who had headed the Kyrgyzstan party in parliament and who was head of the state alcohol inspectorate from 2008 to 2010 -- a time when Ayu's competitors really began feeling the squeeze.

Batyrbekov, who did not respond to a request to comment for this article, was later released.

Almazbek Batyrbekov
Almazbek Batyrbekov

Abdykerimov, shown by The Guardian in 2016 as owning property in Britain's tallest residential tower, was not arrested during this period.

But Ayu's premises were reportedly raided in the months after Jeenbekov's ouster and, in 2021, the Asia News tabloid likened the businessman's position under the new regime to that of "a child from another family."

"They say that Sharshenbek Abdykerimov is now not only unable to promote his party, but that he thinks about his own safety and has gone into hiding," the media outlet wrote.

In formal politics at least, Abdykerimov's last stand appears to have been a bizarre campaign event ahead of Kyrgyzstan's 2021 parliamentary elections. According to a colorful report by Eurasianet, Abdykerimov used the appearance to try to marry off one of his wife's relatives and personally sang about 10 songs onstage.

But by the end of the event Abdykerimov had decided he no longer wanted to campaign for a parliamentary seat. "Everybody should stick to what they know. The shoemaker patches up boots, the baker makes pies," Eurasianet quoted him as saying.

Kanatbek Isaev (left) and Abdykerimov (right) confer at the congress of the Kyrgyzstan party in August 2020.
Kanatbek Isaev (left) and Abdykerimov (right) confer at the congress of the Kyrgyzstan party in August 2020.

Ayu is one of a number of prominent businesses that has come under pressure since Japarov consolidated power.

In December 2022, lawmaker Elvira Surabaldieva complained that her family's businesses had been inspected by officials who came "with threats" that she linked to her independent political positions.

Just days before that, the National Security Committee announced that a well-known resort on the shores of Lake Issyk-Kul had been "returned to the balance of the state" after being illegally privatized. The resort, Akun, was associated with the family of former parliament speaker Chynybai Tursunbekov, who died of coronavirus complications shortly before Japarov rose to power.

But last month, the deputy head of Kyrgyzstan's State Property Management Fund, Meder Mashiev, told lawmakers that the resort was not on the state's balance after all, and that its privatization was not being considered.

Japarov, for his part, says his government is battling corruption and the shadow economy that according to some estimates equates to more than half of GDP. But the head of state's own preference for investors has cast doubt on those claims.

In March, Japarov was shown by his official press service meeting with a group of businessmen that included Khabibula Abdukadyr.

Abdukadyr, a Chinese-born Uyghur businessman, was the subject of a media investigation into mass smuggling and money laundering by RFE/RL, the Organized Crime and Corruption Reporting Project, and the Kyrgyz media outlet Kloop.

Japarov defended their appearance together by noting that Abdukadyr was not under criminal investigation.

In comments to RFE/RL's Kyrgyz Service, former Economy Minister Emil Umetaliev said that the uncertainty around major companies like Ayu will not "inspire confidence" in an economy that badly needs investment.

But Leila Nazgul Seiitbek of Freedom for Eurasia draws parallels between Kyrgyzstan's new business as usual and the era of the Bakiev regime, which was renowned for its ruthlessness.

The current authorities "will continue efforts to take over enterprises and assets that are a source of profit [in order to] strengthen their power," Seiitbek predicted.

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    Chris Rickleton

    Chris Rickleton is a journalist living in Almaty. Before joining RFE/RL he was Central Asia bureau chief for Agence France-Presse, where his reports were regularly republished by major outlets such as MSN, Euronews, Yahoo News, and The Guardian. He is a graduate of the University of St. Andrews in Scotland. 

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