Kazakh leader’s grandson was mystery client at collapsed ‘golden visa’ firm

Dolfin Financial went bust after being accused of mis­lead­ing reg­u­la­tors over its ties with Nurali Aliyev, an oli­garch with lux­u­ry prop­er­ty in London

With The Daily Telegraph and openDemocracy.

The grand­son of Kazakhstan’s auto­crat­ic for­mer leader was the mys­tery client at the cen­tre of the col­lapse of a City firm spe­cial­is­ing in ‘gold­en visas’ for the super-rich, SourceMaterial and openDemocracy have learned.

Dolfin Financial went bust last year after the Financial Conduct Authority banned it from reg­u­lat­ed activ­i­ties say­ing it “dis­hon­est­ly or reck­less­ly pro­vid­ed mis­lead­ing infor­ma­tion” about its visa schemes and a rela­tion­ship with an “ultra-high net worth client”.

The FCA did not name the client but openDemocracy and SourceMaterial have estab­lished that it was Nurali Aliyev, the favoured grand­son of Nursultan Nazarbayev, Kazakhstan’s long-time “leader of the nation”.

In the first week of January, at least 225 peo­ple were killed in clash­es between secu­ri­ty forces and demon­stra­tors against the Kazakhstani regime, whose lead­ers have become spec­tac­u­lar­ly rich from the country’s abun­dant oil, gas and met­als. Much of that wealth is stored in London: a pre­vi­ous SourceMaterial inves­ti­ga­tion revealed that Aliyev’s moth­er, Dariga Nazarbayeva, was the secret own­er of icon­ic prop­er­ties in Baker Street worth £140 million.

“UK law is still rid­dled with loop­holes that enable klep­to­crats to come and go in the UK with impuni­ty and stash their cash here”, said Susan Hawley, head of Spotlight on Corruption, a cam­paign group.

Dolfin’s eva­sions about its rela­tion­ship with Aliyev, 37, are sig­nif­i­cant because foun­da­tions he owned had been sub­ject to an Unexplained Wealth Order, pop­u­lar­ly known as a ‘McMafia order’ after a BBC dra­ma about Russian oli­garchs. The mea­sure requires an indi­vid­ual to account for the ori­gin of their wealth, paving the way for author­i­ties to seize assets if there is no legit­i­mate source of cash.

The FCA said that Dolfin, which man­aged over £1 bil­lion in clients’ assets, was not open with the watch­dog about its con­nec­tions and tried to cov­er its tracks after a jour­nal­ist began ask­ing about its rela­tion­ship with a client served with a McMafia order.

At first Dolfin told the reg­u­la­tor that it had not dealt with the client—now iden­ti­fied as Aliyev—in the pre­ced­ing year. In fact, there was a “sig­nif­i­cant amount of ongo­ing activ­i­ty” between Dolfin and the client, his wife and their busi­ness inter­ests, accord­ing to the FCA’s investigation.

Dolfin hired a “cri­sis man­age­ment con­sul­tan­cy” to pre­vent it being pub­licly linked with Aliyev, while a staff mem­ber was instruct­ed to scrub any ref­er­ences con­nect­ing them to the client from pub­lic reg­is­ters, the FCA said.

Lawyers for Aliyev and Nazarbayeva suc­ceed­ed in over­turn­ing the McMafia order at the High Court last year—though a SourceMaterial inves­ti­ga­tion lat­er cast doubt on some of the evi­dence they pre­sent­ed to the court. The case was “a ground­less and vicious legal action” Aliyev said at the time.

Dolfin spe­cialis­es in secur­ing UK invest­ment visas for wealthy clients. The visas are intend­ed to help attract entre­pre­neurs to Britain if they invest at least £2 million—but the FCA said that the com­pa­ny used a net­work of com­pa­nies to engi­neer a sys­tem that allowed investors to con­tribute only £400,000.

There is wide­spread con­cern that these “gold­en visas” are open to abuse. In 2020 a par­lia­men­tary com­mit­tee called for a review of the UK’s invest­ment visa pro­gramme as part of a report into the threat of Russian inter­fer­ence in British politics.

Court papers reveal that in 2016 Aliyev—who at the age of 19 was head of Kazakhstan’s largest sug­ar pro­duc­er and by 22 was run­ning one of the country’s largest banks—applied for a gold­en visa using his address on The Bishops Avenue, the North London address dubbed “Billionaires’ Row”. The doc­u­ments do not spec­i­fy if he was suc­cess­ful or whether Dolfin facil­i­tat­ed the application.

Dolfin was found­ed in 2013 by Roman Joukovski, a British invest­ment banker named in court papers as hav­ing pre­vi­ous­ly act­ed as a finan­cial advis­er to Aliya Nazarbayeva, the youngest daugh­ter of Nazarbayev.

Joukovski’s work for Aliyev goes back at least as far as 2014 when an enti­ty con­trolled by the banker began man­ag­ing a com­pa­ny through which the oli­garch owned his £33 mil­lion Bishops Avenue property.

In a High Court claim Aliya Nazarbayeva, now 41, alleged that Joukovski and his busi­ness asso­ciates in 2007 cre­at­ed a com­plex off­shore struc­ture “in order to hide and pro­tect” her for­tune because she was a “polit­i­cal­ly exposed per­son”. The asso­ciates then used it to shift more than $300 mil­lion out of Kazakhstan, accord­ing to Nazarbayeva’s claim.

The pur­chas­es includ­ed anoth­er Bishops Avenue man­sion and a pri­vate jet, accord­ing to the High Court claim which was lodged in 2016 but was set­tled ear­li­er this month. In the suit, Nazarbayeva accused two of Joukovski’s asso­ciates of siphon­ing off her cash. The asso­ciates denied any wrong­do­ing and Joukovski him­self was not a defendant.

In a let­ter to SourceMaterial and openDemocracy, Joukovski’s lawyers denied that he had ever pro­vid­ed Ms Nazarbayeva with “any finan­cial or busi­ness advice”. Joukovski, who was not named in the pub­lished FCA notice on Dolfin, had “no mate­r­i­al role” in the regulator’s inves­ti­ga­tion, the lawyers said.

Kazakhstan erupt­ed into vio­lence in ear­ly January when the gov­ern­ment cracked down on peace­ful ral­lies that were trig­gered by a fuel price hike but quick­ly expressed wider anger at an oli­garchic regime under which it is esti­mat­ed 162 peo­ple own 50 per cent of the nation’s wealth.

The coun­try has been plagued by crony­ism and cor­rup­tion since inde­pen­dence from the Soviet Union in 1991. In 2003 James Giffen, an American busi­ness­man was charged with divert­ing $78 mil­lion in bribes from oil com­pa­nies to the Kazakh gov­ern­ment, and released after claim­ing he was work­ing with the CIA at the time.

A 2019 inves­ti­ga­tion by SourceMaterial found that Glencore, a min­ing con­glom­er­ate, had effec­tive­ly gift­ed the own­er­ship of an exclu­sive pri­vate school and two gold­mines to a bil­lion­aire friend of Nazarbayev. Glencore denies any wrongdoing.

The fail­ure of Dolfin throws a spot­light on the UK’s gold­en visa scheme, which offers “red car­pet” treat­ment for oli­garchs seek­ing a haven for sus­pect mon­ey, accord­ing to Hawley of Spotlight on Corruption.

Half of all gold­en visas issued in the UK are now being reviewed by the Home Office. A gov­ern­ment report into the pro­gramme was announced near­ly four years ago but has yet to be published.

“It is essen­tial that the gov­ern­ment urgent­ly pub­lish their report and come clean about how they are going to stop the gold­en visa route rolling out the red car­pet for klep­to­crats,” Hawley said.

Aliyev and his rep­re­sen­ta­tives did not respond to requests for comment.

Picture by UNESCO/Nora Houguenade licensed under cre­ative commons

Original source of arti­cle: https: https://www.source-material.org/