S&P puts Freedom Holding on watch

S&P said it placed its ratings on Freedom Holding Corp., including its B- issuer rating, its brokerage and bank subsidiaries on CreditWatch with negative implications. The subsidiaries include Freedom Finance JSC, Freedom Finance Europe Ltd., Freedom Finance Global plc and Bank Freedom Finance Kazakhstan.

The negative watch considers a short-seller highlighting possible deficiencies in corporate governance and risk management at some of Freedom Holding Corp.'s core subsidiaries over some time. The agency also noted Freedom disclosed in its annual report that in 2022 it provided services to certain individuals and entities sanctioned by the Office of Foreign Assets Control, the European Union, and the United Kingdom.

“Recent revelations about deficiencies in Freedom's risk management and corporate governance could imply risks beyond what is factored in at the current rating level. It has become evident that Freedom entities in Kazakhstan have been subject to multiple regulatory penalties, sanctions, and fines, and there is an ongoing SEC investigation,” the agency said in a press release.

S&P said it aims to resolve the negative watch within 90 days and warned it could downgraded Freedom and its subsidiaries.

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