DW exclusive: Nazarbayev family owns German luxury real estate

A DW inves­ti­ga­tion has found that fam­i­ly mem­bers of for­mer Kazakh President Nursultan Nazarbayev have been buy­ing up high-class real estate in Germany for years.

Schloss Seelach in 2004, pri­or to its restoration

The new Kazakh own­ers spent ten years devel­op­ing the prop­er­ty, con­struct­ing sev­er­al large res­i­den­tial build­ings beside the his­toric palace, and cre­at­ing a vast gar­den com­plete with a water foun­tain. They also had a 1,000 square meter under­ground spa built on the grounds; a glass dome cov­er­ing the 25-meter-long swim­ming pool is so big it can be spot­ted on satel­lite imagery.

Investments totaling €100 million

The German com­mer­cial reg­istry indi­cates that Schloss Seelach GmbH, which holds and man­ages the prop­er­ty, saw an increase in share cap­i­tal of €60 mil­lion ($52 million).

“They spent a lot of mon­ey,” a Baden-Baden source told DW. The indi­vid­ual, who wish­es to remain anony­mous, was involved in devel­op­ing the prop­er­ty sev­er­al years ago. He says plen­ty of pho­tos were tak­en to doc­u­ment the progress and sent to the owners.

“One time, they were dis­ap­point­ed with one of the fres­coes, so every­thing had to be done over, although €150,000 had already been paid [for the job]”, a dif­fer­ent source told DW.

DW found that the Kazakh investors own three addi­tion­al prop­er­ties in the region, among them two out­stand­ing edi­fices under spe­cial pro­tec­tion: a vil­la once owned by archi­tect Gustav Stroh, built in the ear­ly 20th cen­tu­ry; and Schlosshotel Bühlerhöhe. In total, the Kazakh own­ers invest­ed over €100 mil­lion in four vil­las, as the German com­mer­cial reg­istry shows.

Estates fit for a president

“All this is owned by one fam­i­ly; by the fam­i­ly, if you know what I mean,” one source told DW. The man, who wish­es to keep his iden­ti­ty secret, once worked for the Kazakh investors. He only alludes to what he knows.

Lowering his voice, as if fear­ing some­one may be eaves­drop­ping, he told DW: “All this is fit for a president.”

Villa Stroh back in the year 2004

Kazakhstan-based Verus Praedium International, in turn owned by the Kazach Kipros com­pa­ny, is a share­hold­er in the Schloss Seelach Invest GmbH. The German trans­paren­cy reg­istry — estab­lished only a few years ago as part of an EU-wide dri­ve to com­bat mon­ey laun­der­ing — reveals Timur Kulibayev to be the ben­e­fi­cial own­er of this net­work of companies.

He is mar­ried to ex-pres­i­dent Nursultan Nazarbayev’s daugh­ter Dinara, mak­ing him his son-in-law.

A national cultural monument

The trans­paren­cy reg­istry shows that Timur and his wife are joint ben­e­fi­cial own­ers of a sec­ond German com­pa­ny, the Bühlerhöhe Castle Invest GmbH. Mercury Properties, a Kazakh real estate com­pa­ny, is a share­hold­er in Bühlerhöhe Castle Invest GmbH, and owns two hotels near Baden-Baden.

One of them, Schlosshotel Bühlerhöhe, is list­ed as a nation­al cul­tur­al mon­u­ment. Germany’s for­mer chan­cel­lor, Konrad Adenauer, was a reg­u­lar at this establishment. 

In late 2013, the hotel was pur­chased by Kazakh investors, mak­ing it the fourth and final prop­er­ty to change hands. For a long time, Nazarbayev’s con­nec­tion to this small real estate empire remained unknown.

It was, how­ev­er, known that Kazakh oil mag­nate Yakov Tskhay was a share­hold­er in com­pa­nies own­ing the var­i­ous German hotels and palaces. A Kazakh min­istry of finance data­base shows that he act­ed as a junior part­ner along­side Timur Kulibayev and his wife Dina in var­i­ous real estate deals.

Oil magnate transfers ownership

The 71-year-old Yakov Tskhay was the ide­al can­di­date for mak­ing such vast invest­ments with­out attract­ing atten­tion. Indeed, you can­not even find a pic­ture of Tskhay on the internet.

For years, mil­lions flowed through Tskhay’s Dostar-Invest hold­ing and Dostar Oil Service into Baden-Baden prop­er­ties. The com­mer­cial reg­istry shows Tskhay’s German real estate com­pa­nies saw their share cap­i­tal grow to over €100 mil­lion ($113 million).

Schloss Seelach after exten­sive repairs and con­struc­tion work

In 2020, when all con­struc­tion work on Schloss Seelach was com­plet­ed, Tskhay trans­ferred his shares in Schloss Seelach Invest GmbH to Verus Praedium International, owned by Timur Kulibayev. One year ear­li­er, he had sim­i­lar­ly trans­ferred 90% of shares held in Bühlerhöhe Castle Invest GmbH — own­er of Bühl Schlosshotel — to Mercury Properties, a Kazakh com­pa­ny owned by Timur Kulibayev and his wife.

DW reached out to the real estate com­pa­ny in ques­tion to learn about the rea­sons for the own­er­ship trans­fer, yet received no reply. According to the Mercury Properties web­sites, the com­pa­ny has no German hotels in its real estate portfolio.

A powerful son-in-law

Sandschar Bokajev, a well-known Kazakh inves­tiga­tive blog­ger and polit­i­cal com­men­ta­tor, believes Timur Kulibayev is lit­tle more than a straw man. He says there is a sig­nif­i­cant risk of cor­rup­tion when influ­en­tial Kazakh busi­ness­men main­tain such close ties to Nursultan Nazarbayev’s family.

“Nazarbayev’s fam­i­ly mem­bers and indi­vid­u­als close to them have been pri­va­tiz­ing the oil and gas sec­tor, but also oth­er nat­ur­al resources as well as met­al­lur­gy,” Bokajev told DW. He con­tin­ued to say that “every­body in Kazakhstan knows that with­out Timur Kulibayev’s per­mis­sion nobody can get involved in the oil industry.”

Nursultan Nazarbayev’s son-in-law Timur Kulibayev

Kulibayev chairs Kazenergy, an asso­ci­a­tion rep­re­sent­ing Kazakhstan’s oil, gas and ener­gy com­pa­nies. Until January this year, he also served as chair­man of Atameken, the Kazakh cham­ber of indus­try and com­merce, which com­mands con­sid­er­able eco­nom­ic as well as polit­i­cal influence.

Timur Kulibayev and his wife are the coun­try’s rich­est cou­ple. Forbes esti­mates that togeth­er, the two own almost $6 bil­lion (€5,29 bil­lion). Their rise began when Nursultan Nazarbayev became pres­i­dent in 1991. He remained in office until 2019, when he began grad­u­al­ly hand­ing over pow­er to his close ally Kassym-Jomart Tokayev.

Inequality driver of recent protests

To many peo­ple in Kazakhstan, the wealth amassed by the Nazarbayev fam­i­ly epit­o­mizes the inequal­i­ty that blights the coun­try, says polit­i­cal sci­en­tist Dosym Satpayev. This gap between rich and poor was one of the dri­vers of the recent unrest that shook the coun­try, until a bru­tal gov­ern­ment crack­down end­ed the protests in January. Hundreds of peo­ple died.

“While the elite with ties to Nazarbayev grew rich­er, pover­ty grew as well,” Satpayev told DW. The ener­gy sec­tor, which boasts con­sid­er­able oil reserves, has pro­duced great wealth for the rul­ing elites, while work­ers have reg­u­lar­ly gone on strike over low pay, he explained.

Some of the pro­test­ers were also aimed at for­mer pres­i­dent Nazarbayev, who sub­se­quent­ly stepped down as chair­man of the Security Council of Kazakhstan. His son-in-law Timur Kulibayev sim­i­lar­ly stepped down as chair­man of Atameken. President Kassym-Jomart Tokayev vowed to cur­tail the pow­er of the coun­try’s oligarchs.

Opposition calls for asset freeze

Kazakh oppo­si­tion law­mak­ers, some of whom have moved to Europe fear­ing reper­cus­sions, have for years demand­ed that for­eign bank accounts and assets linked to the Nazarbayev fam­i­ly be frozen.

“We demand sanc­tions against Nazarbayev’s fam­i­ly mem­bers and his clos­est allies for human rights vio­la­tions and cor­rup­tion, their asserts must be frozen,” London-based dis­si­dent Akeschan Kaschegeldin told DW in January. In February, sev­er­al Kazakh activists took to the streets in Berlin with sim­i­lar demands.

Sandschar Bokajev says freez­ing the assets of the for­mer pres­i­dent and his fam­i­ly mem­bers would send a sig­nal. “It will only become clear that the Nazarbayev era has end­ed when the mon­ey his fam­i­ly has moved abroad flows back.”

Billions moved abroad

The Organized Crime and Corruption Reporting Project recent­ly revealed that char­i­ta­ble foun­da­tions con­trolled by Nursultan Nazarbayev con­trolled glob­al assets worth some $8 bil­lion (€7 bil­lion). Radio Liberty found that the Nazarbayev fam­i­ly owns lux­u­ry prop­er­ties across Europe (exclud­ing Germany) and the US worth some $800 mil­lion (€705 million).

Nursultan Nazarbayev ruled Kazakhstan from 1991 to 2019

Formally speak­ing, there is noth­ing ille­gal about the Kulibayevs invest­ing in Germany. Doing so would count as ille­gal mon­ey laun­der­ing only if the funds orig­i­nate from crim­i­nal activ­i­ties in Kazakhstan.

As such, from a legal per­spec­tive, there is lit­tle to crit­i­cize about the invest­ments, says Thomas Helm of the German-Kazakh Association. “In terms of seiz­ing prop­er­ty, we can only con­sid­er mea­sures in line with the rule of law; we need to prove everything.”

Stashing away money

What do the own­ers plan to do with their German prop­er­ties? Kazakh real estate com­pa­ny Mercury Properties won’t comment.

“It looks like they are sim­ply try­ing to stash away mon­ey,” Bühl may­or Hubert Schnurr told DW. He is dis­ap­point­ed, as no mon­ey has gone towards mod­ern­iz­ing the two Bühl hotels that have remained shut­tered for years.

While doc­u­ments show the new own­ers invest­ed €20 mil­lion to buy both prop­er­ties, they have done noth­ing to reopen to estab­lish­ments. Over the past years, the only per­sons that have stayed in them were some 100 Lithuanian con­struc­tion work­ers, who were tasked with ren­o­vat­ing the Kazakhs-owned villas.

“I con­stant­ly receive emails from German investors look­ing to the buy the hotels,” may­or Schnurr told DW. “But the Kazakhs nev­er reply to my inquiries.”

This arti­cle has been trans­lat­ed from German
Original source of the arti­cle: Deutsche Welle