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Freedom Holding Corp. has officially flagged the evolving tax landscape in Kazakhstan as a significant risk factor that could negatively impact its business operations. This disclosure was made in the company's annual report submitted to the U.S. Securities and Exchange Commission (SEC).

Tax System Uncertainties Cited as Risk

In its filing, the company explicitly stated, "Uncertainties and ongoing changes in Kazakhstan's tax system could adversely affect our business." Beyond tax-related concerns, Freedom Holding Corp. also listed currency exchange rate fluctuations and currency controls as potential risks.

Financial Discrepancies and Allegations

The report comes amidst scrutiny over the company's financial reporting. Freedom Holding Corp. reported a net annual profit of $153 million in its SEC filing, a figure that has been contrasted with claims of significant losses. Journalist Ayan Sharipbayev pointed out a discrepancy, suggesting the company might have incurred losses of approximately $613 million (around 320 billion tenge).

This alleged inconsistency raises questions about the accuracy of the company's disclosures to regulators. Similar concerns were previously voiced by Amir Kasenov, Chief Editor of KazTAG, who highlighted potential major discrepancies between Freedom Holding Corp.'s financial statements and reported losses in Kazakhstan. Such discrepancies, if proven, could carry legal consequences.

Legal Ramifications and Other Disclosures

Reports suggest that actions related to financial misrepresentation could lead to severe penalties, including up to 20 years imprisonment in the U.S. and up to 12 years in Kazakhstan for individuals involved. Notably, following Sharipbayev's publication, his social media page became inaccessible, with the journalist reporting a "technical attack."

Further examination of Freedom Holding Corp.'s filings revealed potential underestimation of its common share stakes and no planned dividend payments for these shares. It has also been reported that Freedom attempted to recover sums close to 320 billion tenge, the alleged loss amount, from its former general manager, Vitaliy Svetovoy.

In its report to the U.S., the company also disclosed risks related to corruption, mass protests (referencing the January events), and potential military conflicts in Kazakhstan. The filing also indicated that the company has been profiting from Kazakhstan's state and quasi-state debt.

Public Reaction and Calls for Justice

The situation has garnered significant public attention, with various figures expressing concern. A video appeal by KazTAG Chief Editor Amir Kasenov to the President, highlighting these issues, was published on June 2nd. Subsequently, lawyer Yulia Malyukova stated that her client, Kasenov, had lost faith in the objectivity of the investigation.

The wife of the KazTAG Chief Editor, Aigul Kasenova, also issued a statement. By the evening of June 2nd, KazTAG reported widespread support for Kasenov from Kazakhstani citizens, including prominent journalists. Member of Parliament Ermurat Bapi commented on the case, suggesting the involvement of "FSB elements" in higher offices.

Renowned human rights defender Yevgeny Zhovtis noted the "weakness of trust in an independent court." This sentiment was echoed in a letter from lawyers published on June 4th, which stated that "people are beginning to lose faith in judicial justice." President Kassym-Jomart Tokayev, speaking at an international forum on June 5th, reiterated slogans of "Law and Order," "Just Kazakhstan," and a "Listening State," acknowledging that questions about the presence of these principles have been increasingly raised within Kazakh society.