[Last updated: 1 January 2025, unless otherwise noted]

3.1 Shareholding rights and powers

The table below provides an overview of the different rights and powers that are attached to different levels of shareholding in a Kazakhstani listed company.

3.2 Insider dealing and market abuse

Kazakhstani law prohibits a person who has "inside information" from dealing with securities listed on a stock exchange. "Inside information" is defined broadly to include information that:

• is not known to third parties; and
• is capable of affecting the price of securities and financial instruments, if disclosed.

There are certain limited exceptions from this definition. In particular, the following information is not considered to be inside information:

• information based on publicly available data, including research data, forecasts and price appraisals, prepared with the purpose of making an investment decision or recommendation concerning a securities transaction;
• information received from mass media;
• unreliable information from unknown sources disseminated among a wide range of persons; and
• assumptions about the current or planned activities of the company.

The company is required to announce inside information immediately. In general, this means within a term ranging from three business days to 15 calendar days, depending on the type of information.

Kazakhstani law prohibits "market manipulation", which is defined as conducting actions aimed at:

• setting or maintaining prices at a level deviating from the level that would have prevailed as a result of free and fair operation of the market; or
• creating an artificial or false appearance of securities trading.

Disseminating false or misleading market information and exerting direct or indirect pressure on other market participants with the purpose of changing their market behavior is also prohibited.

Failure to comply with the above legal restrictions is an administrative and criminal offense in Kazakhstan. In addition, such a failure may lead to invalidation of the relevant securities transaction by a court in Kazakhstan.

3.3 Due diligence

Kazakhstani law does not contain any specific rules on whether and how a prior due diligence with respect to a publicly listed target company can be organized. Accordingly, there are no restrictions prohibiting a target company from allowing a bidder to obtain more information about it through a due diligence process.

However, if the bidder becomes aware of inside information, the target company should announce such information before the bidder proceeds with the acquisition of the company. If there are several bidders intending to place a bid, the relevant information should be provided to all of them.

3.4 Disclosure of shareholdings

A bidder that intends (acting alone or with its affiliates) to acquire 30% or more of the voting shares of a company in the secondary market must send a prior written notice to the target company. The notice must disclose information about the number of shares to be acquired and the purchase price for such shares.

Following the acquisition, the bidder must make a mandatory tender offer to other shareholders to buy their shares.

A bidder that acquires 10% or more of the voting shares of a company becomes affiliated with the company for the purposes of Kazakhstani law. As such, the bidder must periodically disclose information about itself and its affiliates to the company. The relevant information will then be published in the mainstream media, i.e., on the company's website and the website of the financial reporting depository.

3.5 Disclosures by the target company

As previously mentioned, a publicly listed company must immediately disclose inside information. "Inside information" is defined broadly and there is no exhaustive list of information that constitutes "inside information". Therefore, determination of whether or not the facts surrounding an intended acquisition of a company is "inside information" should be made on a case-by-case basis after careful consideration of all the relevant circumstances. If the relevant information constitutes inside information, then the company should announce this.

In addition, a publicly listed company is subject to general reporting and disclosure requirements under Kazakhstani law. For example, the company is required to publish on the website of the Depository of Financial Statements (www.dfo.kz) certain information, including:

• corporate events, including resolutions adopted by the board of directors and shareholders' meeting;
• information on the total / aggregate remuneration paid to the members of the company's management board in the preceding year;
• a list of the company's affiliated entities;
• changes in the company's shareholding structure where such changes affect the shareholders owning 10% or more of voting shares;
• the company’s annual financial statements along with an auditor's report;
• methodology of valuation of shares when the shares are bought back by the company off exchange (OTC);
• changes in the list of companies in which the company has 10% or more of shareholding interest; and
• changes introduced to the company's securities prospectus.

The following information must be regularly supplied to the KASE:

• the company's annual financial statements for each completed financial year;
• audit reports relating to the company's annual financial statements;
• interim financial statements for each completed quarter of the current financial year;
• information on the shares and the company's shareholders, including information on the number of authorized shares, number of issued and outstanding shares, number of shares which are encumbered and/or blocked, number of shares which are bought back by the company, entities who hold 5% or more of the company's shares, etc.;
• information on the company's affiliated persons; and
• the company's insider list with the specification of persons who have access to inside information.

Any significant information which can affect the company, the price of its securities or the interests of investors must be disclosed to the KASE. Such information includes but is not limited to:

• information on changes in the structure of the company's management bodies;
• information on claims filed against the company with a value equal to or greater than 10% of the company's assets;
• information on the performance of financial obligations in the amount of 10% or more of the company's assets;
• information on intended new issues of the company's securities;
• information on the intention of the company to sell or place its shares constituting 5% or more of the total number of the company's issued and outstanding shares;
• information on the intention of the company to buy back its own voting shares constituting 5% or more of the total number of the company's issued and outstanding shares;
• information on the intention of the company to enter into a (i) major transaction or (ii) transaction in which the company has an interest which involves disposal or acquisition of assets with a value equal to or greater than 10% of the total balance value of the company's assets;
• information on the admission of the company's securities for circulation on markets outside Kazakhstan (issuance and placement of ADRs, GDRs, Eurobonds, etc.); and
• information on awarding a rating to the company or its securities, and information on the revocation of such rating.

The AIX regulations also require a listed company to make ongoing disclosures of important events such as:

• information an annual shareholder meetings;
• appointment of new directors;
• significant transactions;
• related party transactions;
• distributions of dividends;
• proposed new share issuances and redemptions;
• annual report; and
• material claims.

3.6 Mandatory tender offer

The mandatory tender offer rule is triggered if a bidder (acting alone or together with its affiliates) has acquired 30% or more voting shares of a company in the secondary market. In such event, the bidder must make a mandatory tender offer to the remaining shareholders (the offer must be made within 15 business days of acquisition).

The bidder's offer cannot be conditional and the price of the offer must not be less than the market price.

If the company's existing shareholders accept the offer, the bidder must pay for the shares offered by such existing shareholders within 30 business days after the shareholders accept the offer. Any failure by the bidder to make such an offer will result in the bidder being obligated to reduce its shareholding to not more than 29%.

The mandatory tender offer extends to foreign investors.

3.7 Minority shareholders' rights

Kazakhstani law contains the following protections for the minority shareholders' rights:

• shareholders holding, alone or together, 5% of the company's shares have the right to sue directors and managers of the company for mismanagement of the company;
• if the company's general shareholders' meeting takes a decision to delist the company's shares, a shareholder who voted against delisting or who did not participate in the general meeting has the right to require the company to buy back their shares (the buyback is subject to certain restrictions);
• if the company's board of directors' or general shareholders' meeting takes a decision on the company entering into an interested party transaction or a major transaction, a shareholder who does not agree with such decision has the right to require the company to buy back their shares (the buyback is subject to certain restrictions); and
• cumulative voting for the election of the members of the board of directors.