Company: FRHC
Filing Date: 2025-06-13
Form Type: 10-K
Source: 0000924805-25-000012
Chunk: 99

Company: Freedom Holding Corp.
Filing Date: 2025-06-13
Form: 10-K
Item: Item 1A
Chunk 99
---
 distract our management and employees, increase our expenses and can also result in IT, information security and data protection incidents and adversely affect our results of operations. Furthermore, we cannot provide any assurance that we will realize the anticipated benefits and/or synergies of any such acquisition or investment. 

We have engaged in related party transactions and arrangements, which exposes us to a number of risks.

We have engaged in related party transactions and arrangements, in particular with companies controlled by our Chief Executive Officer Timur Turlov, and we expect to continue to do so from time to time going forward.

For example, in the past, we engaged in a significant volume of transactions with our FST Belize affiliate through its omnibus account arrangement with our Freedom EU subsidiary. In fiscal 2025, 2024 and 2023 respectively, approximately —%, 14% and 60% of our fee and commission income was derived from transactions with FST Belize. Consistent with our plan to reduce and ultimately eliminate our omnibus brokerage relationship with FST Belize, we have encouraged customers of FST Belize to open accounts at brokerage companies within our group, in particular Freedom Global and Freedom AR, and conduct ongoing trading through such accounts. During the fiscal year ended March 31, 2024, we estimate that approximately 30,000 customers of FST Belize migrated their brokerage accounts to brokerage companies within our group. The Group wound down these arrangements with FST Belize before the end of fiscal 2024, leading to a decrease in related party transactions during the year ended March 31, 2025 as compared to the year ended March 31, 2024. 

We have also engaged in other related party transactions and arrangements. For example, we have continuing involvement with an affiliated company, microfinance organization Freedom Finance Credit, a company outside of the FRHC group which is controlled by Mr Timur Turlov, through the purchase and sale of right of claims of retail loans. There is no assurance that we will be able to replace these related-party arrangements on comparable terms if needed. If we are required to pursue alternative options, we may incur higher costs, delays, or operational inefficiencies, which could materially impact our business, financial condition, and results of operations.

During the year ended March 31, 2025 the Group incurred advertising and sponsorship expense from Kazakhstan Chess Federation in the amount of  $11,222 thousand. Kazakhstan Chess Federation is a Kazakhstan-based company in which Timur Turlov holds a management position. The Group continues to support the development of