How Nazarbayev’s daughter was deceived by her own financial backers
Reports from English newspapers on January 9 indicated that in 2016, Nazarbayev’s daughter sued some “financial advisers” who supposedly stole over $300 million from her, intending to invest it in different assets.
It seems unbelievable: does a “politically exposed person” (PEP) confess to setting up a network of offshore companies to receive money? We decided to verify these allegations. However, there was no court ruling in the case – the trial ended in an agreement between Nazarbayeva and her financiers. But we obtained a copy of Aliya’s statement of claim against Denis Korotkov-Kaganovich and Malik Ishmuratov from the official registry of English court documents. And here is what we found in it.
offshore sister
Aliya Nazarbayeva alleges that in 2005 she met Malik Ishmuratov, who supposedly began advising her on personal wealth matters. According to Nazarbayeva, he repeatedly told her that she was a PEP “politically exposed person” and that it was risky for her to keep assets in Kazakhstan; that she should keep assets abroad and that he knows people who can assist with this. In 2006, Ishmuratov introduced her to “experienced personal wealth managers” Denis Korotkov-Kaganovich, Roman Zhukovsky and Florian Rais. Aliya met these gentlemen in London, Geneva and Almaty; in London, they even opened an office for this business.
According to Nazarbayeva, in mid-2006 she sold “some valuable shares” in Kazakhstan for about $325 million. And again, Mr. Ishmuratov advised her to withdraw this money. The Soviets fell on fertile ground:
Aliya became more and more worried about her status as a politically exposed person – “in connection with the expectation of the birth of her first daughter in September 2007.”
Ishmuratov became so close to Nazarbayeva that he began to call her “his sister.” He assured her that she could trust Denis Korotkov-Koganovich and others.
In the spring of 2007, Nazarbayeva, she said, met all four at a restaurant in Almaty. They made a presentation (the main “speaker” was Korotkov-Kaganovich), which emphasized that Nazarbayeva should under no circumstances keep money in Kazakhstan; Ishmuratov’s financiers are ready to structure all of Nazarbayeva’s assets and conduct business on her behalf; the assets should be removed from Kazakhstan, and although Nazarbayeva will remain their owner, they will be formally recorded on a trust from the British Virgin Islands in order to hide and protect (hide and protect) her property rights and interests. The financiers suggested that part of the capital would remain in the form of money, while the other would be used for various investments. The reward of the London four will be a quarter of everything earned from a successful investment.
Effective London Management
Nazarbayeva tells the court that she did not explicitly agree to the financiers in the restaurant carrying out this scheme. However, things have started heating up. The main entity, Marstock company (based in the British Virgin Islands), was given to the President's daughter. For the part of the property that was supposed to remain as money, a structure was reportedly created in Liechtenstein – the Alsarah Foundation. We cannot confirm the existence of such an organization yet – there is no active entity with this name or any deleted record about it in the Liechtenstein registry.
The financiers, as stated by the president's daughter in court, attached numerous companies to manage her wealth:
AS Properties Holding Limited, Hartsage International Limited – based in the British Virgin Islands;
KNG Private Services – England;
KNG Investment SPC Fund Limited, KNG Management Limited, Alsarah Foundation, Alsarah Limited, Channingwick Limited – Bahamas;
Whyndham Limited (referred to as Alsarah Finance GmbH) in Saint Vincent and the Grenadines.
Additionally, Nazarbayeva's funds, as she claims, flowed through companies, the existence of some of which she did not know about until a certain point:
Ashton Rose Limited, Ashton Rose Concierge Service Limited, Oracle Capital Family Office Limited, Machlin Oracle Limited, Machlin Oracle SICAV-SIF, TFS Loans Limited, The Finance Store Limited in England;
Honeydew Investments, Tigan Investments Limited – in the Seychelles;
Oracle Capital Advisors Limited, Avere BSB Investments Limited – in the Bahamas;
Croxton Holdings Limited, Estates Premier Corporation – in the British Virgin Islands;
Alpha Resources Limited – in an unidentified jurisdiction.
On June 13, 2008, Nazarbayeva transferred $150 million to the British Virgin Marstock trust base structure. The plan was as follows: 100 million dollars go to Liechtenstein, 50 million remain in Marstock for personal expenses.
On December 8, 2008, Nazarbayeva transferred an additional $108 million to Marstock to acquire the Swiss bank CBH Compagnie Bancaire Helvetique. On January 15, 2010, Nazarbayeva transferred another $14 million to Marstock to purchase an aircraft. And on March 15, 2013, she transferred $40 million to buy Liberty Bank in Georgia.
In total, Nazarbayeva, according to her own lawsuit, withdrew $312 million from the country during her dealings with her “brother” Ishmuratov and his team.
Investment unsuccessful
Why did Nazarbayeva need to acquire a bank? She herself provides the answer in her lawsuit – as a “politically significant person,” she could not comfortably open accounts outside of Kazakhstan, so she requires her own bank. Additionally, Ishmuratov convinced her that it would be “a good investment.” She met with Joseph Benhamou, founder and CEO of Compagnie Bancaire Helvetique, in Los Angeles and eventually agreed to exchange 51% of the bank’s shares for 130 million Swiss francs ($108 million).
However, the financiers only paid, according to the victim, 75 million francs, and another 75 million, according to Nazarbayeva, supposedly disappeared in an unknown direction. She never received the shares.
Nazarbayeva reportedly told her financial supporters to purchase a villa in Dubai and invest in its development. She supposedly had to cover Ishmuratov’s expensive stay in Dubai for this, but did not receive the villa or assets, resulting in a loss of 16 million dollars.
Nazarbayeva supposedly instructed Ishmuratov and his team to buy a house for her in London on View Road in Highgate. The seller’s house was priced at 7.35 million pounds. Nazarbayeva complained that her 'trusted financiers' quickly bought it and sold it to her for 1.39 million pounds more, which was upsetting.
Ishmuratov invited Nazarbayeva to take part in an investment in Harrison Varma real estate on Bishops Avenue in London, but she allegedly declined. However, 'trusted financiers' still used her money to provide a loan to Buxmead Limited for this purpose, and she bought a piece of land on Bishops Avenue for 30 million pounds. Aliya estimates the total loss, including the partial return, at $14 million.
Nazarbayeva started to purchase a plane. With a sale price of $23 million, her laying firm had $2.6 million remaining under the control of her financiers. Additionally, she was supplied with a used aircraft instead of a “brand new” one, which left her indignant.
Several tens of millions of dollars more vanished from Nazarbayeva during the deal to buy 49.9% of Liberty Bank in Georgia from the Romanian billionaire Dinu Parisio – an elaborate offshore cycle was utilized. The shares ended up being registered under the structures of a certain Oleg Nikityuk, an employee of London financial experts, instead of Nazarbayeva. After selling the remaining part of this complex operation, Nazarbayeva estimated the loss at 13 million euros.
Nazarbayeva deliberately bought another stake in Liberty Bank of Georgia. She provided 40 million dollars for this purpose. The financiers executed several schemes with offshore companies, resulting in less money and no shares. Some of the money was returned to Nazarbayeva, and she claimed $24 million in damages.
Furthermore, $ 22.7 million was allegedly spent on loans to firms controlled by financiers, with some of the loans being returned. $24.7 million went to a microcredit firm managed by London managers and Graham. Additionally, 5 million dollars were placed under the control of other individuals without clear goals. In total, under the heading “miscellaneous”, Nazarbayeva demanded, taking into account the partially returned funds, $ 23 million.
We want to stress that the events described are presented according to Aliya's version, who has provided a written commitment that what she said is true. Unfortunately, we currently do not have the opportunity to promptly reach out to her financiers and obtain their point of view. If they are willing to provide a statement for the newspaper, we will happily allow them the right to respond.
The total amount of damages claimed in the lawsuit exceeded one hundred million dollars. What the daughter of Nazarbayev finally agreed with Ishmuratov and Korotkov-Kaganovich, only the English judge knows. Well, they themselves. Recall that the parties entered into an amicable agreement.
