Kazakh despot's daughter went on London spending spree after moving $300m out of country

Aliya Nazarbayeva’s pur­chas­es includ­ed a $25m pri­vate jet and an £8.75m house in Highgate

The daugh­ter of the for­mer pres­i­dent of strife-torn Kazakhstan went on a spend­ing spree in London after mov­ing $300 mil­lion of her per­son­al wealth out of the country.

Aliya Nazarbayeva instruct­ed two pro­fes­sion­al finan­cial advis­ers to buy pala­tial homes, a pri­vate bank and a lux­u­ry jet after trans­fer­ring the mon­ey into a com­plex web of off­shore trusts and com­pa­nies stretch­ing from Liechtenstein to the British Virgin Islands.

Her pur­chas­es includ­ed a $25m Challenger Bombardier pri­vate jet, an £8.75m house in Highgate, north London — meant to help her obtain British res­i­den­cy — and instruct­ing her team to buy a $14m of prop­er­ty in Dubai, includ­ing a vil­la in the man made Palm Jumeirah island.

Details of the 2006 spend­ing spree, revealed for the first time on Saturday, are like­ly to raise eye­brows in Kazakhstan, which has been hit by vio­lent protests aimed at the coun­try’s increas­ing­ly maligned elite.

Aliya is the youngest daugh­ter of Nursultan Nazarbayev, who was Kazakhstan’s pres­i­dent for 28 years until 2019, when he took a back­seat but con­tro­ver­sial­ly retained much of his power.

While he led the coun­try dur­ing and after its Soviet years, a small minor­i­ty amassed enor­mous wealth while many ordi­nary Kazaks strug­gled to get by.

He dra­mat­i­cal­ly quit as head of the Kazakh Security Council on Jan 5 and was report­ed­ly prepar­ing to leave the coun­try. Authorities on Saturday insist­ed Mr Nazarbayev was in the cap­i­tal, named Nur-Sultan in his honour.

It was ear­li­er rumoured that Ms Nazarbayeva was seek­ing to trav­el to Dubai with her father as he tries to flee the upheaval, and that she may hope to use London as a secure base.

Her spend­ing spree in London, described by one expert as “stag­ger­ing”, only came to light when she fell out with the two finan­cial advis­ers, accus­ing them of dis­hon­esty, mis­ap­pro­pri­a­tion of funds, con­spir­a­cy to defraud, breach­es of fidu­cia­ry duty and unjust enrichment.

Ms Nazarbayeva, 41, sued the pair in the High Court in London for £165 mil­lion before set­tling the case in a con­fi­den­tial agree­ment. Her advis­ers, described as rep­utable and respect­ed finan­cial pro­fes­sion­als, denied all the claims. Details of the 2016 case have only just emerged. 

Until now Ms Nazarbayeva — whose eldest sis­ter Dariga owns £80m of prop­er­ty in London — was bet­ter known for mod­el­ling design­er jew­ellery by Damiani, pro­mot­ing her own cou­ture clothes brand and own­ing a high-end beau­ty spa in Almaty, Kazakhstan’s largest city, as well as chair­ing a con­struc­tion company.

On her Instagram account she fre­quent­ly posts pho­tos of her­self with her father, who until his fall from pow­er cul­ti­vat­ed the image of “father of the nation”.

The Nazarbayev fam­i­ly have long estab­lished finan­cial links with the UK. The Kazakh oli­garch paid Prince Andrew £3 mil­lion more than the ask­ing price for his mar­i­tal home of Sunninghill Park in 2007.

Ms Nazarbayeva claimed she trans­ferred $312m of her per­son­al wealth out of the coun­try after advis­ers told her it would be “dan­ger­ous” to keep her for­tune there and that she should “hide” and “dis­guise” it in a net­work of off­shore foun­da­tions and trusts, accord­ing to legal doc­u­ments seen by The Telegraph.

Documents lodged with the High Court include claims that Malik Ishmuratov, a Kazakh wealth man­ag­er, told her “on many occa­sions that Ms Nazarbayeva was a polit­i­cal­ly exposed per­son (PEP)” and that it was “dan­ger­ous for her to keep her assets in Kazakhstan”.

In 2006, Ms Nazarbayeva “con­fid­ed” to Mr Ishmuratov that she had “sold some share­hold­ings in Kazakh com­pa­nies, receiv­ing approx­i­mate­ly $325,000,000”.

Mr Ishmuratov went on to intro­duce Ms Nazarbayev to Denis Korotkov-Koganovich, a Kazakh wealth man­ag­er based in London.

In 2008, accord­ing to court doc­u­ments, Mr Ishmuratov advised Ms Nazarbayeva to set up the Alsarah Foundation, in Liechtenstein, “through which her funds were held and would pro­tect and dis­guise her interest”.

By June 2008, Ms Nazarbayeva “agreed oral­ly” with Mr Ishmuratov to entrust an ini­tial $150,000,000 cap­i­tal to him and Mr Korotkov-Koganovich, trans­fer­ring the cash to Marstock Ltd, a com­pa­ny the wealth man­agers had reg­is­tered in the British Virgin Islands.

This was the first of sev­er­al large trans­fers from Ms Nazarbayev to the pair, even­tu­al­ly totalling $312m.

Ms Nazarbayev claimed that Mr Ishmuratov advised her that as a polit­i­cal­ly exposed per­son she wouldn’t be able to open a bank account and to get around the prob­lem should sim­ply buy a bank instead.

Allegedly on his rec­om­men­da­tion, Ms Nazarbayeva direct­ed Mr Ishmuratov to invest $108m in CBH Bank, an exclu­sive Swiss pri­vate bank, in return for a 51 per cent shareholding.

Her cash was also put into bonds, invest­ment funds — includ­ing a London-based wine fund boast­ing valu­able 18th and 19th cen­tu­ry cognacs — and an Essex-based loans com­pa­ny aimed at bor­row­ers with poor cred­it records.

But, when Ms Nazarbayeva’s rela­tion­ship with Mr Ishmuratov and Mr Korotkov-Koganovich broke down, appar­ent­ly under pres­sure from her father, she lodged a £165m [$233m] claim against them in the London High Court in March 2016.

She claimed that the two advis­ers had not fol­lowed her wish­es and had alleged­ly prof­it­ed over-and-above their 25 per cent prof­it agree­ment, as well as invest­ing her mon­ey in trans­ac­tions she had reject­ed, includ­ing a lux­u­ry devel­op­ment in the Bishop’s Avenue “billionaire’s row” in Hampstead.

She also accused them of mis­ap­pro­pri­at­ing 75million Swiss francs, over half the mon­ey meant to buy the Swiss bank.

The pair denied the claims and main­tained they had act­ed at all times in her finan­cial interests.

Ms Nazarbayeva sought an injunc­tion stop­ping any fur­ther deal­ings with her assets and seek­ing pay­ment of dam­ages and com­pen­sa­tion, with inter­est. The claim was sub­se­quent­ly set­tled in a con­fi­den­tial agreement.

While there is no sug­ges­tion that Ms Nazarbayeva’s mon­ey was acquired unlaw­ful­ly, Kazakhstan com­men­ta­tors say the rev­e­la­tions raise ques­tions about the way her wealth was moved out of the country.

Tom Mayne, a vis­it­ing fel­low at Chatham House and research fel­low at Exeter University with detailed knowl­edge of Kazakhstan, said: “This rais­es many ques­tions as to Aliya Nazarbayeva’s busi­ness deal­ings in Kazakhstan. The amount of mon­ey is staggering.

“This case shows how the UK is often used as a safe haven for this kind of mon­ey. People who have tak­en to the streets in Katakhstan look around and see the fam­i­ly of Nazarbayev have mul­ti-mil­lion pound hous­es and mil­lions to invest in what they want.”

Ms Nazarbayeva did not respond to a request for comment.

A spokesman for Mr Ishmuratov and Mr Korotkov-Koganovich said: “The unfound­ed alle­ga­tions against Mr Ishmuratov and Mr Korotkov-Koganovitch were denied, the claim defend­ed, and an ami­ca­ble set­tle­ment was reached.”

CBH Bank has asked us to make clear that a com­plete list of the bank’s share­hold­ers is pub­lished each year in an audit­ed report and nei­ther Ms Nazarbayeva or Mr Ishmuratov are or ever have been share­hold­ers of the bank.

Original source of arti­cle: https://www.telegraph.co.uk/