UK Authorities and London Secret Properties controlled by Dariga Nazarbayeva

Kazakh Opposition sent to UK Authorities the summary of research into London Secret Properties controlled by Dariga Nazarbayeva, Dictator Nursultan Nazarbayev’s Eldest Daughter

Exiled Kazakh oppo­si­tion activists have appealed to min­is­ters and par­lia­men­tar­i­ans in the United Kingdom to inves­ti­gate secret prop­er­ties belong­ing to Dariga Nazarbayeva and her fam­i­ly. At issue are sev­er­al expen­sive build­ings in London pur­chased by her late hus­band Rakhat Aliyev, who accord­ing to offi­cial accounts com­mit­ted sui­cide in a prison in Vienna, the Austrian cap­i­tal, on the eve of his tri­al in 2015. Austrian author­i­ties pros­e­cut­ed Rakhat Aliyev over alle­ga­tions from Kazakh cit­i­zens who accused him of killing busi­ness rivals, tor­ture, rack­e­teer­ing and busi­ness seizures. 

The most impor­tant find­ings of the inves­ti­ga­tion relate to build­ings and land in London at: 

215–229 Baker Street (“Abbey House”), 

231–237 Baker Street (“Abbey House Annexe”), 

6–8 Melcombe Street, 

32 Denewood Road,

33 The Bishops Avenue.

These prop­er­ties were pur­chased by Rakhat Aliyev at a time when he was the head of a crim­i­nal group of offi­cers from the Kazakh Tax Police and National Security Committee.  As the head of these agen­cies, as well as the son-in-law and the clos­est con­fi­dant of President Nazarbayev, Rakhat Aliyev con­trolled many of Kazakhstan’s monop­o­lis­tic indus­tries, rack­e­teer­ing and seiz­ing suc­cess­ful busi­ness­es with impunity. 

Dariga Nazarbayeva and their eldest son Nuraly Nazarbayev (Aliyev) act­ed as part­ners and accom­plices in these busi­ness­es and then, after Aliyev’s death, prac­ti­cal­ly inher­it­ed his assets both at home and abroad. 

A sum­ma­ry of the inves­ti­ga­tion car­ried out by the British agency Ventham Consulting (https://www.venthamconsulting.co.uk/) spe­cial­ly for KIAR con­tains the names of the shell com­pa­nies, lawyers and nom­i­nal own­ers, behind which Rakhat Aliyev first hid, and then his wife and chil­dren. It is thanks to these peo­ple that the real estate crim­i­nal­ly acquired and laun­dered in the UK by Rakhat Aliyev and Dariga Nazarbayeva has not yet been sub­ject to con­fis­ca­tion under the Unexplained Wealth Order. 

SUMMARY OF REVIEW OF THE NCA UWO CASE

Background

The UK’s National Crime Agency (NCA) pre­pared a case inves­ti­gat­ing the alleged links between the late Rakhat ALIYEV and a num­ber of prop­er­ties in London, fund­ed by what was believed to be funds obtained from crim­i­nal activ­i­ty. As a result of their inves­ti­ga­tion, at an ex parte hear­ing on 22/05/2019, the Hon. Mr Justice SUPPERSTONE grant­ed the NCA three Unexplained Wealth Orders (UWOs) and their relat­ed Interim Freezing Orders (IFOs) relat­ing to:

32 Denewood Road, London N6 4AH – UWO ref­er­ence CO/1540/2019, direct­ed against Mr Andrew J. BAKER, and IFO ref­er­ence CO/1541/2019, direct­ed against Mr Andrew J. BAKER, and the Villa Magna Foundation;

33 The Bishops Avenue, London N2 0BN – UWO ref­er­ence CO/1542/2019, direct­ed against the Manrick Private Foundation, and IFO ref­er­ence CO/1543/2019, direct­ed against the Manrick Private Foundation, and Alderton Investments Limited; and 

Apartments 9 and 14, 21 Manresa Road, London SW3 6LZ – UWO ref­er­ence CO/1544/2019, direct­ed against Mr Andrew J. BAKER, and IFO ref­er­ence CO/1545/2019, direct­ed against Mr Andrew J. BAKER, and the Tropicana Assets Foundation.

The Respondents to these UWOs and IFOs sub­se­quent­ly applied, on 04/09/2019, to the High Court for dis­charge of these Orders and a hear­ing was held before the Hon. Mrs Justice LANG on 10/03/2020 and 11/03/2020. On 08/04/2020 Mrs Justice LANG deliv­ered her Finding. She held that the NCA had failed to prove that the funds used to pur­chase the prop­er­ties orig­i­nat­ed from crim­i­nal activ­i­ty, that they were direct­ly linked to Rakhat ALIYEV, or that the Respondents were involved in seri­ous crime. 

She fur­ther stat­ed her view that the NCA’s case was flawed by inad­e­quate inves­ti­ga­tion, and that the NCA had failed to car­ry out a fair-mind­ed eval­u­a­tion of mate­r­i­al pro­vid­ed by the Respondents.

The NCA lodged an appeal against this Finding, which was heard by the Right Hon Mrs Justice CARR at the Court of Appeal (Civil Division). She dis­missed the appli­ca­tion to appeal on 17/06/2020. 

Purpose of Report

Ventham Consulting was inde­pen­dent­ly retained to research and pre­pare a num­ber of reports con­cern­ing indi­vid­u­als and com­pa­nies con­nect­ed to the prop­er­ties that were sub­ject of the UWOs.

This report reviews all of the mate­r­i­al that was made pub­lic in the course of the hear­ings, and obtained through open-source research around it, and asso­ci­at­ed mate­r­i­al. As a result, it is believed that there was a sound case to answer in rela­tion to the UWOs, but that it failed because of:

• inad­e­quate inves­ti­ga­tion (as high­light­ed by Mrs Justice LANG);
• a fail­ure ade­quate­ly to research expla­na­tions giv­en by the Respondents;
• a fail­ure to chal­lenge asser­tions made by the Respondents’ Counsel; and
• a fail­ure to utilise open-source research – much of which had been pro­vid­ed to the NCA, 
  pri­or to the hear­ing, by inter­est­ed parties.

It is clear from the research that the three prop­er­ties which, for ease of ref­er­ence, are described as the “UWO Properties” are linked to oth­er prop­er­ties that have, for sev­er­al years, been sus­pect­ed of hav­ing been pur­chased by Rakhat ALIYEV. These prop­er­ties, all adjoin­ing, are:

215–229 Baker Street, London NW1 (known as “Abbey House”);

231–237 Baker Street, London NW1 (known as “Abbey House Annexe”);

6–8 Melcombe Street, London NW1; and land adjoin­ing and con­nect­ed with these properties.

For ease of ref­er­ence these prop­er­ties are described as the “Baker Street Properties.”

This report high­lights evi­dence that appears to point to oth­er offences, includ­ing mon­ey laun­der­ing, fail­ure to con­duct ade­quate anti mon­ey laun­der­ing (AML) checks, and Companies Act offences.

Summary of specific findings

• No pri­ma­ry evi­dence was adduced to show Rakhat ALIYEV and Dariga NAZARBAYEVA had been legal­ly divorced, call­ing into ques­tion the asser­tion that funds had been law­ful­ly trans­ferred to the latter.

• No evi­dence was adduced to prove that either Dariga NAZARBAYEVA or Nurali Aliyev were the ulti­mate ben­e­fi­cial own­ers of Twingold Holding Ltd at the time of the pur­chase of 32 Denewood Road, call­ing into ques­tion the true title for the prop­er­ty and the source of the funds to pur­chase it.

• Andrew BAKER, pres­i­dent of both Tropicana Assets Foundation and Villa Magna Foundation, has been involved in at least three legal actions in the USA, one brought by the Department of Homeland Security, in which fraud and mon­ey laun­der­ing have been alleged. This was not brought before the Hearing.

• Significant dif­fer­ences have been found between doc­u­men­tary evi­dence and the account giv­en by Dariga NAZARBAYEVA’s lawyers con­cern­ing her trans­fer of shares in JSC Kant.

• There is evi­dence that the ulti­mate ben­e­fi­cial own­er of the ven­dor of 32 Denewood Road(Huckabay Holdings Ltd) is like­ly to have been Vladimir PALIKHATA, who may have con­tin­ued to have an inter­est in the prop­er­ty sev­er­al months after the trans­fer of title to Twingold Holding Ltd. No evi­dence has been made pub­lic to indi­cate what anti mon­ey laun­der­ing (AML) process­es were con­duct­ed by the pur­chasers of the prop­er­ty, to ensure they were not breach­ing AML reg­u­la­tions in deal­ing with Mr PALIKHATA.

• The Respondents sug­gest­ed that the funds to pur­chase 32 Denewood Road were part of a much larg­er sum that had been trans­ferred from Dariga NAZARBAYEVA’s account with Nurbank to Greatex Trade & Invest Corp. However, no evi­dence was adduced to show the source and pur­pose of oth­er trans­ac­tions at the time, which may have shown that the entire amount was used for anoth­er pur­pose, and call­ing into ques­tion the source of the funds to pur­chase the property.

• The account giv­en by Nurali ALIYEV’s lawyers, con­cern­ing the monies appar­ent­ly used as a deposit to pur­chase 33 The Bishops Avenue, does not appear to be con­sis­tent with the chronol­o­gy of trans­ac­tions, and appears to have con­flat­ed two sep­a­rate trans­ac­tions of approx­i­mate­ly £4.5 mil­lion, the source of one being whol­ly unac­count­ed for.

• Dolores Trade & Invest Ltd (one of the com­pa­nies involved in the pur­chase of 33 The Bishops Avenue) was sub­se­quent­ly dis­solved and, in the course of efforts to have it restored to the reg­is­ter of com­pa­nies, what appear to be false state­ments were made to Companies House. It appears to have held a crit­i­cal role, and was the only UK-reg­is­tered com­pa­ny in the com­plex structure.

• The bank through which Dariga NAZARBAYEVA trans­ferred at least £118.5 mil­lion, Julius Baer Bank (JBB), and which con­vert­ed it into US dol­lars, was found to have com­mit­ted seri­ous breach­es of anti-mon­ey laun­der­ing mea­sures between 2009 and 2018 (the peri­od in which she used her accounts). The bank used a finan­cial instru­ment (a “Fiduciary Call Deposit”) that would have con­cealed the iden­ti­ty of the ulti­mate ben­e­fi­cial own­er of the funds, to trans­fer the money.

• The lawyer, Benjamin WARD, who (when with Herbert Smith LLP) act­ed for the pur­chas­er of 32 Denewood Road, was sub­se­quent­ly appoint­ed a direc­tor of four com­pa­nies linked to Dariga NAZARBAYEVA, one of which was direct­ly involved with the “Baker Street Properties” and the oth­er three of which have the appear­ance of hav­ing been cre­at­ed for the pur­pos­es of obscur­ing finan­cial trans­fers, at the time of the pur­chase of the lease­hold on the “Baker Street Properties”.

• Both Nicholas DRYDEN and Mukhamed-Ali KURMANBAYEV, when involved in the sev­er­al com­pa­nies involved in the pur­chas­es of both the “Baker Street Properties” and the “UWO Properties”, appear to have made numer­ous errors in their signed dec­la­ra­tions to Companies House, and may have made false state­ments in these.

• Bezhad NAGHIBI, a man with no appar­ent qual­i­fi­ca­tions or expe­ri­ence to act as a direc­tor of com­pa­nies, was appoint­ed to sev­er­al that appear to have been estab­lished to providea par­al­lel means of trans­fer­ring funds at the time of the pur­chase of the “UWO Properties” and after­wards. He also appears to have car­ried out duties on behalf of Dariga NAZARBAYEVA in rela­tion to her estranged son, Aisultan NAZARBAYEV (also known as Aisultan RAKHAT), who announced he had infor­ma­tion about large-scale fraud and mon­ey-laun­der­ing relat­ing to Kazakhstan and Russia, and who died, appar­ent­ly of a drug over­dose, in London in August 2020.

• A few weeks before the Hearing, Aisultan NAZARBAYEV / RAKHAT made pub­lic state­ments alleg­ing Kazakhstan was sell­ing gas to the Russian firm Gazprom “for a pit­tance” and that this was a means of laun­der­ing mon­ey from Kazakhstan to wealthy Russians and Kazakhs. This may have been inter­pret­ed as refer­ring to TOO “GasDevelopment” – the com­pa­ny to which his moth­er, Dariga NAZARBAYEVA, sold her shares in JSC Kant.

Assessment

It is clear that the per­son­al­i­ties, cor­po­rate struc­tures and mech­a­nisms by which first the “Baker Street Properties” and then the “UWO Properties” were pur­chased were not only sim­i­lar but had sev­er­al over­lap­ping ele­ments. In par­tic­u­lar, it is evi­dent that there is a clear hier­ar­chy of roles and respon­si­bil­i­ties. At the top are Dariga NAZARBAYEVA and Nurali ALIYEV. Set to one side, and not so inti­mate­ly con­cerned in the trans­ac­tions, are oth­er very wealthy Kazakhs and Russians, such as Rashid SARSENOV and Vladimir PALIKHOTA, who appear to have had their own agen­das, for which they were pre­pared to accept the hun­dreds of mil­lions of pounds in shares or cash that was offered.

The prin­ci­pal facil­i­ta­tors relied upon by Dariga NAZARBAYEVA and Nurali ALIYEV were at the next lev­el, and prin­ci­pal­ly lawyers and accoun­tants: Andrew BAKER, Nicholas DRYDEN, Bernard ENRY, Mukhamed Ali KURMANBAYEV, and Massimiliano DALL’OSSO. It is telling that many of these men had under­tak­en the same work for Rakhat ALIYEV, and sim­ply trans­ferred their work to his ex-wife and (appar­ent­ly estranged) eldest son. It is notable that these men act­ed as offi­cers in almost all of the com­pa­nies, and pro­vide the clear­est evi­dence of links between the “Baker Street Properties” and the “UWO Properties”. As has been not­ed above, at least two of them appear to have made repeat­ed and sig­nif­i­cant errors in doc­u­ments sub­mit­ted to Companies House – to the extent that they may be like­ly to be regard­ed as hav­ing made false declarations.

Between the prin­ci­pal facil­i­ta­tors and the very wealthy Kazakhs and Russians are such peo­ple as Dina ABDYKALYKOVA, Timur SEGIZBAYEV, Askar TARABAYEV, and Galimzhan YESSENOV. These are all Kazakhs, and appear to be either relat­ed to the NAZARBAYEV fam­i­ly, or have close friend­ships with them, and for whom they were pre­pared to act as trustees of oth­er­wise ensure the smooth trans­fer of funds.

Acting along­side the pri­ma­ry facil­i­ta­tors are the com­pa­ny for­ma­tion agents – most notably Sarah and Edward PETRE-MEARS, Clare Alice WILSON, and Amanda USHER-WILSON, Michelle BEZERRA, and Gillian MASTERS. Without their will­ing­ness to form the com­pa­ny struc­tures, and pro­vide the nec­es­sary cor­po­rate ser­vices, the con­vo­lut­ed struc­tures (which appear to have been con­struct­ed sole­ly for the pur­pose of cre­at­ing con­fu­sion and obfus­ca­tion) would have been impos­si­ble. They were assist­ed by the likes of Mohamed ALALI, Damian CALDERBANK, Stephen KELLY, Andrew STUART, andJohn WORTLEY-HUNT, and it is notable that all of these men gave address­es in Dubai or the UAE. Greatex Int. Real Estate LLC and KZ Capital General Trading LLC are locat­ed in these Emirates, and may be a rea­son for this coin­ci­dence of addresses.

Lastly, there are the men who were appoint­ed as direc­tors of the sev­er­al com­pa­nies at crit­i­cal points, and appear to have under­tak­en the nec­es­sary actions to ensure the trans­ac­tions went smooth­ly. Principal among these were Bezhad NAGHIBI, and Benjamin WARD. They too, like Nicholas DRYDEN and Mukhamed Ali KURMANBAYEV, appear to have placed them­selves (or been placed) in invid­i­ous posi­tions with regard to poten­tial offences under the Companies Act. While it appears that they were not trust­ed to the same extent as the prin­ci­pal facil­i­ta­tors, they nonethe­less appear to have played crit­i­cal roles at spe­cif­ic times. 

Examination of the chronol­o­gy shows that their appoint­ments came imme­di­ate­ly before or after crit­i­cal events in the prepa­ra­tion for the pur­chas­es of the prop­er­ties and rein­forces the infer­ence that their roles were con­nect­ed to these. It seems like­ly that both NAGHIBI and WARD would have per­ti­nent infor­ma­tion as to the func­tions of the sev­er­al com­pa­nies to which they were appointed.

Ventham Consulting

Graphics by Youyou Zhou

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