Kazakhstan and Nasdaq-listed fintech Kaspi.kz have come out fighting against a short seller’s report that argues the company’s claim of it having zero exposure to Russia is a "grave deception".

The assessment from Culper Research caused the share price of Kaspi—Kazakhstan’s second largest lender—to drop by as much as 22% when it was released on September 18, with Culper concluding: “We believe Kaspi’s premium valuation and US listing are at risk, and shares are headed lower.”

"As the U.S. and other nations continue to broaden sanctions against those found to be aiding Russia's wartime economy, we believe Kaspi now risks secondary sanctions," the report also warned.

Kaspi’s shares on the Nasdaq ended September 24 at $104.47. Prior to the release of the Culper report, they were trading at just over $120. The trough prior to the moderate rebound was recorded at $92.89 on September 19.

In a September 23 statement, Kazakhstan's Agency for Regulation and Development of Financial Markets described Kaspi as "one of the country's systemically important and steadily developing banks, demonstrating sustainable growth and a high level of transparency."

"The bank fully complies with the sanctions regime of the U.S., the European Union, and other foreign countries," the regulator said, referencing the sanctions imposed on Moscow over its full-scale invasion of Ukraine.

The main shareholders in Kaspi are Kazakh billionaire Vyacheslav Kim, Georgia-born Mikheil Lomtadze and Baring Funds, part of a Commonwealth of Independent States-focused investor in private equity.

On September 24, Kaspi released its own rebuttal of the Culper report, stating that the fintech heavyweight in 2023 generated 99.6% of its revenue from Kazakhstan as disclosed in its US initial public offering (IPO) prospectus ahead of the Nasdaq listing at the start of this year.

“The rest of our revenue was generated from our operations in Azerbaijan and Ukraine,” it added.

Kaspi added: “We have comprehensive policies and procedures designed to avoid working with any consumers or companies that appear on international sanctions lists

“Our subsidiary Kaspi Bank is one of the largest and systematically important financial institutions in Kazakhstan and it operates under the strict supervision and regulations set by the National Bank of Kazakhstan, the Agency for Regulation and Development of Financial Markets and the Financial Monitoring Agency of the Republic of Kazakhstan.”

Kaspi.kz consumers and merchants, including foreign citizens, “must complete our ‘know your customer’ (KYC) process,” said Kaspi, adding: “When opening an account, we biometrically identify a consumer. Consumers must provide their full name, date of birth, address, passport, Kazakh tax ID and Kazakh mobile phone number.

“Our policy is to not admit any customer or work with any counterparty that appears on international sanction lists. Checks are performed regardless of residency.”

Stating that Kaspi’s policy is to not work with sanctioned banks, the company said: “We have international correspondent bank accounts with leading financial institutions, including The Bank of New York Mellon (USA), Citi Bank (USA), Societe Generale (France), Landesbank Baden-Wuerttemberg (Germany), Commerzbank AG (Germany) Raiffeisen Bank International AG (Austria) and Raiffeisen Bank (Russia).

“Raiffeisen Bank Russia is a fully owned subsidiary of Raiffeisen International, one of Austria’s largest banks. The bank is under the direct supervision of the European Central Bank and is not subject to any sanctions, either at the group level or at the Russian subsidiary level.”

Kaspi also stated that “we believe we are in compliance with applicable laws and are not aware of any anti-money laundering investigations against Kaspi.kz”.