Some people might think I've got a pile of cash sitting on my nightstand. Well, Timur, that is exactly what a lot of people think. Sometimes we have to delay building something till next year because that money is going into chess instead. 4.5 billion tenge in 2024. What could possibly require that much? Yeah. All you really need is to buy everyone a board, right? Exactly. Timur Turlov, CEO of the Freedom Group and president of Kazakhstan's Chess Federation.
Timur, good afternoon. Thank you so much for taking the time to speak with us. But before we begin our interview, I feel it's important to make a brief disclaimer for our viewers. The topic and timing of our conversation were agreed well in advance, long before the recent media scandal in which your company has found itself caught up. I won't be asking you to comment on it, especially since your company has already released a fairly detailed statement addressing the facts. But I would like to ask you this: given that this isn't the first scandal to emerge in quite a short span of time, do you believe that such reputational challenges are in a way inevitable for large businesses? Is it simply the nature of the game that once you reach a certain scale, these things are bound to happen?
Absolutely. When no one talks about you, good or bad, you probably just don't exist. But the moment you start gaining visibility, attracting attention, growing quickly, well, we've come to understand that this kind of scrutiny is absolutely inevitable.
As long as there's a market, and ours is a fairly large one, in my view, the black PR industry in Kazakhstan is actually bigger than the white one. And if there's a gun hanging on the wall, it will go off from time to time.
Whenever someone holds a grudge, or a deal doesn't go through, or someone feels you're growing a bit too fast and needs to be slowed down, they'll try to reach for that gun. They'll use every tool associated with that kind of pressure. And unfortunately in our country, those tools often prove to be quite effective.
But have you developed any internal protocols for handling this sort of thing? Or is it always more of an improvisation?
By now it's really in our DNA how we respond to these things. We try to be transparent. We try to explain things clearly. We talk to people. We stick to reasoned, grounded communication. It's not pleasant, of course, but it does build a kind of immunity over time.
So just as reputational challenges are, as you say, an inevitable part of running a large business, would you also say that a sense of social responsibility is equally essential?
Not everyone, not always. But there are moments when it becomes truly important, and we understand that too. There's a time to gather stones and a time to cast stones. And I think right now in our society, we've reached a moment where unity, involvement, these things matter enormously. We really want to see this country become prosperous and successful, not torn apart by internal conflicts or social injustice. So yes, right now, I'd say social responsibility is a must.
Well, let's talk now about how you and your company are actually building that balance between running a business and contributing to social initiatives.
Timur, I feel like we could talk about a whole range of topics with you, from your relocation to the state of Kazakhstan's economy and the financial markets.
The relocation that was 13 years ago.
Yes. And people still ask you about it like it's some kind of extraordinary story. And I totally get why my colleagues are so curious. But today I'd like to focus on something different: the topic of corporate social engagement and responsibility. Your company is behind a number of large-scale and costly initiatives. And I'm wondering, in Kazakhstan, do you see this social responsibility as something that's expected, even essential, for big businesses?
Well, if we look at what's happened over the past two or three years, I'd say we've definitely seen the emergence, or maybe the strengthening, of a culture of participation in the country's public life.
What the president's been talking about in his speeches, particularly when addressing domestic businesses, it's actually a very straightforward and logical message. This is our one and only country. If we don't all come together right now and do the things that clearly need to be done, and let's be honest, we don't have all the time in the world, we risk putting our future in jeopardy.
One of the strongest demands coming from society has been the demand for fairness, for unity. Because if we're united, we're stronger.
That's interesting because a lot of your colleagues, when I speak with them, they say, well, fairness means I pay my taxes. But you've taken a different approach, and so have many major companies here. Let me put it plainly: is this a not-so-subtle hint from the government that says, come on, chip in? Or is it something that's coming from the business community, a kind of voluntary initiative to say, let's put some of our revenue to good use?
I'd say it's a bit of both. Was there a call from the government and the president for businesses to take a more active role in society? Yes, there was.
You mean back in 2022, 2023?
If you really listen to those addresses, the message is clear. The president keeps highlighting how important this is, and we get it. We understand why he's saying it and why, frankly, it's in everyone's best interest.
Because we're at a critical juncture. It's vital that we stay on course with our development. Right now, we need to bring every available resource to the table so that we can move forward, not backward. If the government and the business sector are aligned, all pulling in the same direction, then I believe we'll build a strong, prosperous future, and that future will include businesses that are worth more, too.
Yeah. But if we start pointing fingers and saying, well, the government should do this and business should only do that, then we're in trouble. We all have limited resources. Even we, because of our social commitments, have had to postpone or scale back business projects. That's the reality. It's always a balancing act. I mean, some people might think I've got a pile of cash sitting on my nightstand, but trust me, there's nothing there.
Well, Timur, that is exactly what a lot of people think.
In reality, we're carrying around $7 billion in debt and we're making regular payments on that. If we start a new project that costs $100 million, our debt becomes $7.1 billion. That's how it works. Like any business or country for that matter, our equity is just the difference between assets and liabilities. The government too is taking on more and more social obligations, and it can't afford to stop building schools. That's clear. It can't stop raising teachers' salaries either, because otherwise we'll have a broken education system. So yes, we understand the logic and we understand why now is the time to act. Because if we start dividing up responsibility, saying that's your job, this is ours, we'll lose momentum. We're in a critical moment. What we need now is trust and coordinated effort. If we work together, we all benefit from the outcome. Right now, our social spending is actually higher than our tax payments. At least in our group, we're doing more social projects than we're paying in taxes.
Actually, let's talk numbers for a second. 4.5 billion tenge in 2024. That's the official figure just for supporting the Kazakhstan Chess Federation. That's an absolutely huge amount of money. How is that money actually distributed? I mean, seriously, what could possibly require that much? Yeah. All you really need is to buy everyone a board, right?
Exactly. But in reality, there are two sides to it. There's the Kazakhstan Chess Federation, and then there's everything related to international tournaments and FIDE, and that has a similar budget actually.
Is that included in the 4.5 or is that on top?
Right. So, the total investment in chess is actually almost twice that amount in 2024, not just what goes through the federation. And I'll explain why. There are things specifically for professional players. If you want to seriously boost the level of your national team, they need to compete more, meaning Kazakh players need regular exposure. They need to play a lot of tournaments.
That means flying them out, putting them up in hotels, feeding them, letting them play, and flying them back. All of that costs money. And we figured that with the Federation, we were running at what we call an optimal mode. Almost one tournament every working day.
They're all different. Of course, it's not like the same players go to every event. It's a large community. There are amateur events, pro events. We have a big tournament called the Senate Open, for example, which is for public servants, MPs, senators. Then there are corporate events we run, and they're really great. There's also a FIDE initiative that brings chess into prisons. We run corporate tournaments among police officers and other law enforcement. We even had a big tournament recently supported by the Ministry of Internal Affairs.
We're also doing events specifically for teachers. There's a separate tournament just for them. So, we've got loads of competitions, professional ones that are used for selection and rankings, and also tons of amateur ones.
But why bother with amateur chess? I mean, sure, professional players are a source of national pride. It's great when our players are winning, but prisons, police, teachers, why put money into that?
Well, we believe it's something that really brings people together. It helps us build relationships with a wide range of stakeholders. We're promoting chess in the broadest sense of the word, because once someone falls in love with chess, they're much more likely to sign their kid up for a chess club or to support our initiatives down the line. Working with different groups, corporations, government officials, doctors, teachers, police officers, helps us build allies in promoting the game.
We're raising the profile of chess, and we know it contributes to developing intellectual potential. Plus, it's a great way to start a conversation. We've seen the impact it has on families, too. Chess is now in schools, and that wouldn't have happened without the support of the Ministry of Education and the Ministry of Science and Higher Education. They even helped develop the curriculum. We now officially have a job title in Kazakhstan: chess teacher. That position didn't exist before.
Right. And in July 2023, a comprehensive chess development plan was adopted through to 2027, but I couldn't find anywhere how much funding that plan comes with.
Ah, well, that explains it. So, the government sees the value, but it's your organization that funds the whole thing. That's right. And you said it impacts families. How exactly?
For one thing, sitting across from someone at a chessboard is a great way to have a conversation. And for a lot of people, that's not so easy these days. Seriously, think about trying to talk to your 14-year-old. But you sit down, start a game, and the conversation just happens naturally. It's a fantastic tool. Honestly, loads of people play chess just for fun. They're not thinking about being good. They just enjoy making moves. Good ones, bad ones, doesn't matter. We were looking at chess.com recently. It's the biggest chess platform in the world, and 99.5% of players there have a rating below third category.
So basically, they just log on and move pieces around pretty much. They're not aiming to become grandmasters or anything. Got it?
But that's the beauty of it. You can be terrible at chess and still have a great time. And when both players are equally bad, it's actually a lot of fun.
With the way you're actively promoting chess, one might suspect that as a financier, you're using it as a networking platform for yourself. I mean, just look at the Wall Street Gambit. You gather all these top-tier finance people, and obviously you're talking to them. So, is this also a global networking opportunity for you, just under the guise of chess? Is that how it works?
