Kazakhstan: Anti-corruption Sanctions

Dame Margaret Hodge
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I thank Mr Speaker for granting this debate and the Minister for joining us. I also thank a host of civil society experts who have helped me—too many to name—but I give special thanks to Professor John Heathershaw of Exeter University, Adam Hug of the Foreign Policy Centre and Sue Hawley of Spotlight on Corruption.

Earlier this week, the Foreign Secretary announced welcome moves to toughen up the sanctions regime against Russia, but we should not be waiting for a potential military crisis before we act against illicit finance at home and corruption overseas. We should act and use the powers we have now.

Today, I want to shine a light on foreign corruption in another state, not simply because that is important in itself, but because I want to highlight the UK’s role in facilitating shameful wrongdoing. Put simply, Britain enables kleptocracy. My ask of the Government is twofold. First, they should act proactively by sanctioning wrongdoers in Kazakhstan. Secondly, now that they have committed to tabling an economic crime Bill in the next Session, they must ensure the Bill’s provisions are fit for purpose, tough, effective and appropriate so that Britain can show by what we do that we are seriously committed to fighting the scourge of dirty money.

It is 30 years since Kazakhstan, a multi-ethnic, resource-rich central Asian state, emerged from the disintegration of the Soviet Union. In those years, Kazakhstan has, by some indicators, been a success. Its GDP growth has outstripped that of many of its neighbours, including Russia. Living standards are higher and until the 2010s Kazakhstan appeared to enjoy political stability.

But there is another side to the Kazakhstan story. The country is ruled by a kleptocratic elite that has grown rich off the back of money stolen from its people. Until 2019, its autocratic dictator was Nursultan Nazarbayev. In Kazakhstan, just 162 people own 55% of the wealth—mostly members of Nazarbayev’s family or close associates. The country has a poor human rights record and little media freedom.

As early as 2006, Jonathan Winer, former Deputy Assistant Secretary of State for International Law Enforcement in the Clinton Administration, said:

“I can’t think of a leader in the free world as notoriously corrupt as Nazarbayev… We’ve know about his corruption for at least 15 years”.

Yet in Britain, we turned a blind eye, ignored the corruption and helped the Kazakh regime launder and spend its dirty money.

Three examples confirm my view. Between 2008 and 2015, we issued 205 Kazakh kleptocrats with golden visas to settle with their dirty money in the UK, which was the fifth most common country for users of the Tier 1 Investor scheme. A recent Chatham House report reveals that the Kazakh elite owns over half a billion pounds of property in the UK. Around £330 million of that belongs to Nazarbayev’s extended family, including Sunninghill Park, allegedly bought by Nazarbayev’s son-in-law for £15 million—£3 million over the asking Toggle showing location ofColumn 568price. The Organised Crime and Corruption Reporting Project has revealed how Nazarbayev secretly controls four charitable foundations with at least $7.8 billion-worth of assets, invested in everything from hotels to banks. This global fortune is part-owned through a UK listed holding company set up in 2020—Jusan Technologies.

We have opened our borders, our property market and our financial structures to the Kazakh ruling class, enabling them to launder their illicit wealth and spend it. Worse, we do not even enforce our existing laws against any of this wrongdoing.

Why does this matter now? Because the fault lines of the corrupt Kazakh political elite have exploded. Protests, initially triggered by the soaring costs of liquidised petroleum gas, quickly developed into a national movement against the governing regime. The response from the new President, Tokayev, allegedly handpicked for the job by Nazarbayev, was initially to distance himself from the old regime. He then requested support from Russia, which sent in troops. Finally, on 7 January, he deployed the military against the protesters, with a “shoot to kill without warning” order. Protesters, most of whom were peaceful citizens, were gunned down without so much as a warning shot. According to some experts, this shocking, violent suppression has left 225 dead, 4,500 injured and 10,000 arrested.

That terrible loss of life in Kazakhstan should lead to a moment of reflection for us in Britain. We are complicit in what is happening in Kazakhstan. Our lack of transparency over foreign property ownership, our lax regulatory regime and our weak enforcement agencies have all aided and abetted the Kazakh elite.

Yet it is not too late for us to act. The Government have put in place a new regime of anti-corruption sanctions to complement our Magnitsky sanctions. They allow us to designate foreign, corrupt actors, freeze their UK assets, stop them entering Britain and limit their access to our financial or legal enablers. Sanctions are powerful tools, but, Minister, they must be used. That is why the Government should impose sanctions on the Kazakh oligarchs, who have systematically robbed their people to line their own pockets. The recent violence demonstrates the true cost of kleptocracy. It is surely up to us, in the UK, the jurisdiction that has done so much to facilitate corruption in Kazakhstan, to act and hold these individuals to account.

Our all-party group on anti-corruption and responsible tax is co-operating with representatives from legislatures in Europe and America. We have formed the Inter-Parliamentary Alliance against Kleptocracy, and together we are urging Governments in the UK, the US and the EU to issue sanctions against the kleptocrats of Kazakhstan. Today, I am calling for action from the UK to designate anti-corruption sanctions against the following individuals, whom I shall name, all of whom are allegedly involved in asset seizure and bribery. The details I will provide are limited because of time, but every story is shocking.

There is Timur Kulibayev, his wife Dinаra Nazarbayeva —the daughter of Nazarbayev—and their associate Arvind Tiku. Evidence suggests that Kulibayev abused his position to accrue vast wealth. In 2020, the Financial Times showed that Kulibayev benefited from a secret scheme to divert profits from big state pipeline contracts. He has faced money laundering and bribery investigations Toggle showing location ofColumn 569in other jurisdictions. His worth, according to Forbes, is $2.9 billion, and he owns at least £60 million of real estate here in the UK.

There is Dariga Nazarbayeva and her rumoured husband Kairat Sharipbayev. Dariga is Nazarbayev’s eldest daughter. Her empire, estimated by Forbes at $595 million, is hidden in an incredibly complex system of offshore companies, foundations and trusts. Three of her London properties were subject to a failed unexplained wealth order, but investigators at Source Material allege that Nazarbayeva may have misled the UK High Court. Meanwhile, Sharipbayev is allegedly one of the beneficiaries of a $334 million fraud at Kazakh bank Bank RBK, which has been labelled

“the bank of the Nazarbayev family”.

There is Nurali Aliyev, son of Dariga and grandson of the former ruler. Aliyev was appointed deputy chairman of a private Kazakh bank called Nurbank—after the grandfather—at the age of 21, and chairman at 22. UK court documents show he received a $65 million loan from a bank in 2008, through a company which then made a further loan. According to Nurali’s lawyers, he used some of those funds to purchase a £39.5 million house in Bishops Avenue.

There is Karim Massimov, and his associate Aigul Nuriyeva. Massimov is a former Prime Minister of Kazakhstan who has been subject to bribery allegations, including from UK listed companies, as reported in the FT. He was also implicated in allegations of bribery by Airbus for the purchase of 45 helicopters. Nuriyeva is a Kazakh banker and alleged proxy for Massimov, who is himself implicated in major bribery scandals totalling $64 million with the Swedish telecoms company Teli.

Vladimir Kim is Kazakhstan’s richest man, worth some $4.3 billion. He chaired Kazakhmys plc, the first Kazakh company to list on the London Stock Exchange. A Global Witness report claimed that Kim acted as a proxy owner, and that Nazarbayev actually controlled the company. In 2017, Kim’s daughter Kamila, then 18, bought three flats worth $60 million in Knightsbridge. His associate, Eduard Ogay, is co-owner of Kazakhmys—sorry if I am pronouncing these names wrongly—and is alleged to have given bribes to the country’s Prime Minister.

Kenes Rakishev is a mysteriously wealthy Kazakh businessman worth up to $1.6 billion, with close ties to the political elite, and a close associate of the head of the Chechen Republic, who has been sanctioned by the US.

Sauat Mynbayev was Minister for energy and mineral resources, yet he secretly co-owned a Bermuda-based company worth $3 billion, which won public contracts in Kazakhstan despite the obvious conflicts of interest with his ministerial role. His wife and son own property in the UK.

Alexander Mashkevich, Patokh Chodiev and an associate who died were known as the “Trio”, renowned for their ownership of Eurasian Natural Resources Corporation, a Kazakh-based mining company also listed on the London Stock Exchange. In 2013, the Serious Fraud Office launched a criminal investigation into the company, following allegations of bribery to African political figures.Toggle showing location ofColumn 570

Bulat Utemuratov is a former chief of staff to Nazarbayev. A US diplomatic cable reported allegations that Utemuratov was the President’s “personal financial manager” and his own website assesses his personal wealth at $3.9 billion.

Bolat Nazarbayev is Nursultan Nazarbayev’s very wealthy brother. In 2008, he purchased a £20 million apartment in Manhattan’s ultra-exclusive Plaza Hotel. He is accused of involvement in armed groups that helped to spark the January violence.

Akhmetzhan Yesimov, chairman of the sovereign wealth fund, allegedly abused his position to give his former son-in-law, Galimzhan Yessenov, related party loans through secretive British Virgin Islands companies to buy a UK entity called Kazphosphate. Yessenov is now one of Kazakhstan’s richest men.

Kairat Boranbayev’s daughter married Nazarbayev’s grandson—it is all in the family. He held a number of positions, including one involved in the notoriously corrupt transit of gas from Turkmenistan. He owns a £25.4 million mansion in an exclusive gated community in Virginia Water, a £60 million flat in One Hyde Park, and three luxury apartments, worth more than £15 million, in Knightsbridge.

Then there is Alexander Klebanov and his son Yakov. Alexander has an estimated wealth of $374 million and chairs the Central Asian Electric Power Corporation. The two act as financial proxies for the former president’s family, and are thought to have helped Dariga Nazarbayeva to avoid the unexplained wealth order.

Nurlan Nigmatulin, Baurzhan Baibek and Marat Beketayev are senior figures in the ruling Nur Otan party and are close associates of Nazarbayev. They are embedded in supporting corruption and allegedly responsible for human rights abuses.

A UK High Court has highlighted how Aliya Nazarbayeva, Nazarbayev’s youngest daughter, moved over $300 million out of the country through complex offshore structures, including in the BVI. Aidan Karibzhanov is accused by his former wife of having profited from his position as a banker by selling the Kazakhstan national telecoms company and, I quote,

“privatization of public assets resulting in huge profits to politically connected insiders at the expense of the state”.

Kairat Satybaldy and Samat Abish are Nazarbayev’s nephews, enjoying significant wealth through offshore structures. Both are key players in Nazarbayev’s inner circle, involved in the current power struggle that is undermining peace and security.

I have named those people. Imposing sanctions on this corrupt elite will not of itself root out evil practices or lead to a radical democratic transformation in Kazakhstan, but it will demonstrate that we mean what we say when we commit to fighting dirty money and corruption. The cost of inaction is high. The reputation of London and our financial services sector is already sullied, with the UK seen as the jurisdiction of choice for dirty money. With swift action, we can begin to restore the idea of a good global Britain and demonstrate to our allies that we will not provide a safe haven for kleptocrats or oligarchs.

I ask the Minister whether he will consider the individuals I have named and impose sanctions on those who have stolen from their country, laundered their money here, used UK structures to hide their ill-gotten gains, used Toggle showing location ofColumn 571the golden visa route to gain entry to the UK or committed human rights abuses. Will he act now? Only by strengthening transparency, legislating for tougher regulations and ensuring consistent, strong enforcement will we be able to hold our heads up high again as a trusted jurisdiction that lives by the highest standards. We must finally turn the warm words of successive Governments into firm actions in the promised economic crime Bill. Will the Minister confirm that the Bill will be considered this year? If the Government fail yet again on these two fronts, the only ones who will be delighted are people such as the criminal kleptocrats from Kazakhstan who will be laughing all the way to the bank.

The Minister for the Middle East, North Africa and North America
(James Cleverly)
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I am grateful to the right hon. Member for Barking (Dame Margaret Hodge) for securing the debate and I pay tribute to the work that she has done on these complex issues both in her former role as a Select Committee Chair and as chair of the all-party group on anti-corruption and responsible tax. As my noble Friend Lord Ahmad, the Minister with responsibility for south and central Asia, is in the other place, it is my pleasure to respond on behalf of the Government.

This month, the UK celebrated 30 years of diplomatic relations with Kazakhstan, our largest partner in central Asia. Over the years, we have built a strong partnership in areas such as oil and gas investment, education and financial services, as well as promoting human rights and democratic values. We have had real success in encouraging a more open business environment in Kazakhstan, including through the Astana International Financial Centre.

Hon. Members—though few are here—will have witnessed the violent clashes that took place in January after initially peaceful protests in western Kazakhstan over increased fuel prices. As the right hon. Lady said, the latest estimates are that more than 200 people died during those clashes. There were reports of organised attacks on property and law enforcement officers, and almost 10,000 people were detained. I am sure that she will join me and others in roundly condemning the violence and loss of life.

My noble Friend Lord Ahmad has been engaged intensively on these issues, speaking to senior Kazakh contacts last month, including President Tokayev’s special representative on 14 January. In each of these calls, the Minister has underlined the importance of Kazakhstan respecting its international human rights commitments. President Tokayev has called what happened an “attempted coup” and we are urgently seeking further information about that very serious development. We welcome the President’s decision to establish an investigative commission to ascertain what led to these unprecedented events and loss of life. We support the Kazakh authorities’ commitment that this will be an effective and transparent investigation and have encouraged them to consider international and independent expertise.

In his public remarks, the President was clear that the original peaceful protests were based on legitimate grievances about the socioeconomic situation and that urgent economic reform is needed. We support that message and we seek opportunities, with our international partners, to support those reforms.Toggle showing location ofColumn 572

President Tokayev has also been critical of an existing social system that has seen economic growth largely benefit a small number of very rich people in society, as the right hon. Lady highlighted. We are well aware of reports on the alleged acquisition of assets by wealthy members of elite Kazakh society, including of substantial property holdings here in the UK. It is, of course, the role of law enforcement agencies to investigate any specific allegations of wrongdoing, as she said.

As a leading financial services centre, the UK can, unfortunately, be the destination for the proceeds of corruption, despite findings from the Financial Action Task Force that the UK has one of the strongest systems to combat money laundering and terrorist financing of more than 60 countries assessed to date. Consequently, the integrated review of security, defence, development and foreign policy committed to take stronger action to bear down on illicit finance, including by bolstering the National Economic Crime Centre and working with our closest allies, such as the United States, to maximise our collective impact against this common threat.

The recent spending review has put new resources behind that commitment: £42 million for economic crime reform from now until 2025. That is in addition to £63 million for Companies House reform and the introduction of the economic crime (anti-money laundering) levy, which will raise around £100 million per year from the private sector, to combat economic crime from 2023. These additional resources will significantly enhance our ability to tackle transnational corruption and illicit finance.

Since 2006, the Foreign, Commonwealth and Development Office has funded the National Crime Agency’s international corruption unit, a world-renowned law enforcement capability focused on investigating corruption from developing countries with UK links. Since funding started in 2006, ICU investigations have resulted in the conviction of 30 people and companies for corruption offences. It has also frozen, confiscated or returned to developing countries more than £1.1 billion-worth of stolen assets.

In addition, the UK leads and hosts the International Anti-Corruption Coordination Centre, which brings together specialist law enforcement officers from multiple agencies around the world to tackle allegations of grand corruption. The IACCC significantly enhances our ability to investigate complex, multi-jurisdictional corruption cases. Since its launch in 2017, it has provided support on 88 investigations.

In 2019, the UK launched its economic crime plan that provides a joined-up public and private sector response to economic crime. The success of our public-private partnership is perfectly demonstrated by the work of the joint money laundering intelligence taskforce, a mechanism that enables law enforcement and the financial sector to work more closely together to detect, prevent and disrupt money laundering and economic crime. To date, the joint money laundering intelligence taskforce has helped more than 600 law enforcement investigations. This has directly contributed to over 150 arrests and the seizure of more than £34 million in illicit funds.

Finally, in April last year, the UK launched the global anti-corruption sanctions regime, which the right hon. Lady mentioned in her remarks. This allows the Government to impose asset freezes and travel bans on Toggle showing location ofColumn 573those involved in serious corruption around the world, and it sends a message that the UK will not tolerate those individuals, or their ill-gotten gains, in our country. The regime does not target countries, but instead targets those individuals or organisations that are responsible. We believe that this is a strong, personal deterrent and it has been used so far to sanction 27 individuals in 10 different countries.

Collectively, these investments significantly enhance our ability to bring corrupt actors to justice. They also send a clear message that we will use the full force of our capabilities to bear down on those who seek to use the UK as a destination for their illegitimate wealth.

Criminals, corrupt elites and individuals who threaten our security are not welcome in the UK.

Dame Margaret Hodge
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I am extremely grateful to the Minister, but he has given me a very general response. I named more than 20 individuals, many of whom are members of the same family. Will he undertake to investigate the circumstances that I briefly outlined, and undertake that, if I am correct, those individuals will face sanctions under the new regime?

Column 574is located here

James Cleverly
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The right hon. Lady will, I am sure, understand that it can sometimes be counterproductive to go into details about what future sanctions designations the UK Government might undertake, but I can absolutely assure her that my officials, and indeed the House, will have taken note of the individuals she highlighted in her speech.

In relation to Kazakhstan, or indeed any other country, our law enforcement agencies continue to monitor and, if necessary, investigate particular cases where circumstances require. We know that corruption and illicit finance can have a devastating impact on states and citizens by undermining democracy, bankrolling authoritarian agendas, and enabling serious and organised crime. The UK has shown, on the world stage, that it has both the means and the will to promote responsible financial behaviour. We have shown that we stand ready to take action, domestically and internationally, wherever necessary. I am sure you will agree, Madam Deputy Speaker, that we must now stand together to show that corruption has no place in this country.

Question put and agreed to.

Previously wrote about it https://www.parliament.uk/


UK mining group arranged Paris trip for Kazakh prime minister’s family

Kazakhmys organised private jet, Disneyland visit and George V hotel stay, drawing scrutiny under anti-bribery law

A FTSE 100 mining company arranged for the family of the Kazakh prime minister to fly to France by private jet, visit Disneyland Paris and stay at the George V hotel, triggering scrutiny under the UK’s anti-bribery law. Leaked 2011 emails between the office of then Kazakh prime minister Karim Massimov and employees at Kazakhmys have been passed by a Kazakh dissident to the UK’s Serious Fraud Office, which handles cases of suspected corruption.

Kazakhmys was the biggest miner of Kazakhstan’s copious stocks of copper, its business dependent on the continued favour of the Kazakh regime. After floating in London in 2005, it became one of the UK’s most valuable companies, worth $10bn. Kazakhmys was bound by the Bribery Act, which makes it a crime to offer any “advantage” to an official of a foreign state to advance business interests. The very same day that the law came into effect on July 1 2011, an aide to Mr Massimov sent an email to Eduard Ogay, then executive director of Kazakhmys. “The chief has assigned me to work with you on the departure of his family of 4 people to Paris,” Mr Massimov’s aide wrote. The prime minister would not be going himself but his family had specific requirements that included “the best 12-seater aeroplane” and three adjoining hotel rooms.  

That email and others seen by the Financial Times show that Kazakhmys employees proceeded to make the arrangements as instructed. The trip would have cost about $100,000. The incident remained secret for years. Kazakhmys spun off some of its mines to a private company and changed the public company’s name to Kaz Minerals, retaining its London listing, in 2014.

That year, a vast leak of emails seemingly hacked from the accounts of Kazakh officials appeared on an obscure website. Looking through them years later, Kazakh dissidents came across the messages revealing the Massimov holiday. In 2019 they sent them to the SFO as well as to the company. A spokesman for Kaz Minerals said the company had conducted “a thorough review of all available correspondence and financial records as soon as it became aware of this matter.

This review, since which no new information has come to light, found no evidence of payment by the company (or by any of its employees) for these travel arrangements, and no evidence of a request for, or expectation of, payment by the company or by any of its employees for these travel arrangements.” Twice weekly newsletter Energy is the world’s indispensable business and Energy Source is its newsletter. Every Tuesday and Thursday, direct to your inbox, Energy Source brings you essential news, forward-thinking analysis and insider intelligence. 

up here. The spokesman said the company did not know who did pay for the holiday nor why its staff had been asked to organise it. He declined to say whether the company had investigated whether there had been other instances of employees providing services to government officials. Two leading UK lawyers who work on corruption cases said they would expect the SFO’s investigators to seek more details.

Even if the company did not pay for the holiday, its employees had still given their time to Mr Massimov, though the two expert lawyers said prosecutors would be unlikely to pursue a corruption investigation on that score alone. But if a company or its representatives were found to have funded such a holiday, “that could be a bribe by the company in favour of a public official”, said Ruby Hamid, a former prosecutor who is now a partner at Ashurst.  The SFO said: “We are aware of the allegations but can provide no further comment.” In general, the SFO added, “while any gift or favour could arguably be considered a bribe”, decisions to prosecute were taken only when there was sufficient evidence and public interest “in the light of all the circumstances”. Mr Massimov did not respond to a request for comment. Mr Ogay now runs the private vehicle that holds the spun-off mining assets, which referred questions to Kaz Minerals.

Massimov, Kulibayev, Nuriyeva, TeliaSonera. The art of corruption.


In light of Karim Massimov receiving the new rank of General Lieutenant, we publish information on his involvement as a hidden investor in a variety of lucrative Kazakh telecoms companies, using his friend Aigul Nuriyeva as the proxy shareholder. Through this business Nuriyeva amassed a fortune of hundreds of millions of dollars, though this research highlights evidence to suggest that she was not the true shareholder, and that the ultimate beneficial owner was Massimov and other members of the Kazakh political elite. 

This feature forms the basis of continuing research on the topic by a group of independent researchers and academics including researchers who worked on previous investigation regarding Swiss repatriation of laundered money from Kazakhstan whose final report will be published in due course.


 Telia has been active in Kazakhstan since the late 1990s. In order to retain its privileged position in the Kazakh market Telia has engaged in corrupt activities with senior political figures, namely Timur Kulibayev and later Karim Massimov.

 The first seemingly corrupt deals were conducted in the mid-2000s taking two different forms. Within Kazakhstan Telia acquired dormant companies such as AR-Telecom and KT-Telecom for $25 million. Additionally Telia acquired telecommunication assets owned by Kulibayev’s Visor Group in Nepal and Cambodia for $484 million. The real value of those assets was significantly lower. One such example was Applifone, a Cambodian telecommunications company, on which Telia wrote off $100 million shortly of its acquisition.

 In 2012 Telia bought a 49% in GSM Kazakhstan from Kazakh Telecom for $1.5 billion. The price was vastly inflated. Massimov and Kulibayev were recipients through Deran and Bodam, respectively, of a large portion of Telia’s fee.

 In 2013 and in Telia’s last large corrupt payment in Kazakhstan it acquired WiMax licences for $175 million from entities ultimately owned Aigul Nuryieva and Alexander Klebanov, two of Massimov’s proxies. The companies involved were Lavita Holdings BV and Mymari Holding BV. The $175 million fee was largest settlement that Veysal Aral, CEO of KCell and allegedly the principal facilitator of Telia’s corrupt payments to Massimov, could pass through Telia’s board in Stockholm. Veysal Aral was dismissed amid allegations of corruption in 2014.

 In addition to the big ticket items above Telia and KCell channelled regular bribes to Massimov through engineering contracts via three Kazakh companies: Micro Engineering LLP; GSM Tech Management LLP and Micro Wireless LLP. These payments were concealed as service contracts for antennas in KCell’s network which were invoice at $2000 per visit; approximately 10 times the market rate. To cover this scheme in February

2015 KCell petitioned the General Prosecutor’s Office in Kazakhstan to initiate a criminal probe into its own executives.

 Some of the illicit monies paid by Telia to Massimov were used to acquire a 50% stake in the Altynalmas gold mine from Canada-listed Turquoise Hill Resources. In particular Massimov put up $51 million through Lavita Holding in the deal. In 2014 the mine was sold to Polymetal in the region of $1 billion.



Karim Massimov. Kazakhstani Prime minister at 2010

TeliaSonera’s (“Telia”) engagement in Kazakhstan dates back to the late 1990s when the company, together with Turkcell, acquired a 51% position in GSM Kazakhstan, a mobile network operator, in which Kazakhtelecom owned the remaining 49%. In 2012, however, Kazakhtelecom extracted itself from GSM Kazakhstan’s share capital by selling its stake to Telia, for $1.5 billion.

In 2007, 2008 and 2013 Telia, separately from Turkcell, acquired WiMAX businesses from Kazakhstan-registered companies. In 2007 and 2008 Telia paid circa $25 million for WiMAX licences acquired from AR-Telecom LLP and KT-Telecom LLP. In 2013 Telia acquired WiMAX licences from Midas Telecom LLP (“Midas”) for $170 million.

The same year the company bought a 20% stake in KazTransCom (“KTC”) for a consideration approximately $22.5 million. The corporate disclosures pertaining to the two transactions indicate that the ultimate beneficiaries of the proceedings from the WiMAX business were Aigul Nuriyeva (“Nuriyeva”) and Aleksandr Klebanov (“Klebanov”), individuals considered by sources to be fronts for Prime Minister Karim Massimov (“Massimov”); and Raushan Sagdiyeva (“Sagdiyeva”), a person understood to have links to both Massimov and Timur Kulibayev (“Kulibayev”). Sagdiyeva was the formal recipient of the $22.5 million payment. These transactions are described in greater detail below.


A former official in the Kazakh Agency of Information and Communications indicated that the existence of a relationship between Telia and the Kazakh political establishment became apparent in approximately the mid-2000s. In that period Kulibayev was engaged with Telia in South Asia whilst Massimov acquired a proportion of Kazakhtelecom, then Telia’s partner in GSM Kazakhstan (later renamed KCell).


Documentary evidence of a relationship between Telia and Kulibayev’s Visor Group can be traced back to 2008. Between 2008 and 2012, Telia, via several subsidiaries, had channelled significant amounts of cash to Visor, which took the form of acquisitions of the latter’s telecoms assets in Nepal and Cambodia and loans.

Visor Group entered the South Asian telecoms market in the mid-2000s. In 2005 Visor Group entered into an agreement with a consortium of investors led by Upendra Mahato (“Upendra”), a Nepalese businessman, to establish Spice Nepal, a local mobile provider.

Upendra became acquainted with members of the Kazakh political establishment in the early 2000s. He has had commercial interests in the post-Soviet space since the 1990s, when he stroke a partnership with Aleksandr Milyavsky (“Milyavsky”), a Russian businessman turned politician. Milyavsky and Upendra reportedly privatised the Rubin factory in Moscow, on the basis of which they developed the famous Gorbushkin Dvor commercial centre. In addition to Russia, Upendra had reportedly owned businesses in Belarus.

Upendra initially met Visor representatives through mutual acquaintances. At that meeting Upendra is said to have offered Visor a partnership in Nepal, where he was in the processing of registering Spice Nepal. Visor reportedly provided investment in exchange for a 60% stake in the company. In subsequent years it increased its stake in Spice Nepal and had also entered the Cambodian market, where it acquired mobile provider Applifone (see below).


In 2008 Telia acquired part of Visor’s South Asian telecoms assets. According to TeliaSonera’s annual report, in 2008 its subsidiary UTA Holding BV (“UTA Holding”) acquired 51% of the shares in TeliaSonera Asia Holding BV (“Asia Holding BV”), through which Visor owned 80% of Spice Cell and 100% of Applifone. This gave Telia control of approximately 40% of Spice Cell and a controlling stake in Applifone. The Dutch corporate registry stated that the total consideration paid by UTA Holding to Visor Group was approximately $484 million. Visor Group retained a 49% shareholding in Asia Holding BV. In addition to the acquisition, UTA Holding’s annual report stated that in 2008 the company had provided a loan of $26.5 million to an undisclosed company, which was identified in an independent investigation published online as an unnamed Visor Group entity.

According to Dutch corporate records, on 8th December 2010 UTA Holding increased its ownership in Asia Holding BV from 51% to 75.45%, by paying Visor another $160 million. The same year Spice Nepal was rebranded into NCell. In December 2015 Telia and Visor sold their 75.45% and 24.55% stakes respectively in NCell for $1.03 billion. 

The buyer was Cambodian telecoms conglomerate Axiata Group.

TeliaSonera: 2013 annual report, p.27.


In December 2010 Telia and Upendra agreed to merge their Cambodian businesses, respectively Applifone and Latezl. Telia received a 25% stake in the new venture. In December 2012 Telia divested the investment by selling to Axiata Group. The price paid for 100% of Latezl was in the region of $155 million. Telia had written off approximately $100 million in goodwill on Applifone.


During the course of 2011 and 2012 Telia acquired Nepal Satellite, described in industry reports as a small telecom company with a market share of less than one percent. In 2011 Telia and Visor, via Asia Holding BV, paid $30 million for a stake in Nepal Satellite. In Asia Holding BV’s annual accounts it is stated that the $30 million was paid for a 51% stake in Airbell Services Ltd (“Airbell”), the Cypriot company owning Nepal Satellite. According to historical records held by the Cypriot registry, the selling party was BVI-registered vehicle Zhodar Investments Ltd (“Zhodar Investments”).

Asia Holding BV’s annual report stated that in 2012 the company “sold and transferred” its investment in Airbell. Cypriot records state that the transfer was done to TeliaSonera Norway Nepal Holding AS, another Telia subsidiary. According to Telia’s annual report, on 26th April 2012 Telia bought the remaining 49% in Airbell, which brought Telia’s stake in Nepal Satellite from 50% to 75%. Telia booked a good will of SEK 1.2 billion ($157 million). In September 2013, Telia divested Airbell by selling its stake back to an entity named Zhodar Investments at a declared loss of SEK 389 million ($60 million).2 Telia explained its decision to sell the business by quoting “regulatory uncertainty”. The beneficial ownership of Zhodar Investments was not established and research did not find any other links that would directly lead to Kulibayev or Massimov.

Archives of the Cypriot corporate registry indicated that local company Anu Oil Ltd (“Anu Oil”) was in 2008 the sole shareholder of Airbell. Sources said that Anu Oil was Samata Prasad (“Prasad”), an Indian businessman. Prasad is a longstanding partner of Upendra and Milyavsky.

Dutch corporate records do not disclose the current ownership structure of Asia Holding BV, the holding company for Telia and Visor’s assets in Asia. From 1st September 2008 until 1st October 2008 the company’s sole shareholder was Netherlands-registered entity SEA Telecom Investments BV (“SEA Telecom”), a vehicle incorporated on 30th July 2008 whose sole shareholder is Panorpa Holding BV (“Panorpa Holding”). Panorpa Holding is wholly owned by Visor Growth Fund BV.

Between 30th July 2008 and 8th July 2011 SEA Telecom was owned by Alkatento Trading Ltd (“Alkatento”), a company registered in Cyprus on 5th June 2008 and dissolved on 21st October 2015. Alkatento’s shareholder at liquidation was BVI-registered ASIA Telecom Grouping Ltd and its director was Kazakh national Shyngys Utepov. The company’s past shareholders included Meridian CIS Ltd. The latter company appears to be affiliated with Meridian Capital Ltd, the investment fund widely acknowledged to have been previously controlled by Kulibayev and Kazakh businessman Nurzhan Sukhanberdin.


Goga Ashkenazi with Timur Kulibayev 

The relationship between Telia and the Kazakh government has been initially channelled through Kulibayev. In approximately 2011–2012, however, Massimov took charge. A source in the Presidential Administration of Kazakhstan said that this was due to Kulibayev’s fallout with Nazarbayev over the issue of Kulibayev’s lover in London. The source considered that Kulibayev simply did not have the time and administrative reach to continue his engagement with Telia at that level.

According to two former Telia executives, throughout the years Kulibayev, and later Massimov, ensured — via bureaucratic mechanisms — that no major competitors arose for Telia. KCell, Telia’s local subsidiary, had enjoyed a market share of circa 50% for a long time and the revenues were constantly on the rise. In 2013 KCell declared total revenue of $1.02 billion. In return for this support as agreed with Kulibayev, Telia have been paying kickbacks.

The majority of kickbacks took the form of regular payments – masked as marketing and servicing contracts to companies close to the Kazakh political establishment as well as KCell management. The bigger kickbacks, which were directed personally to Massimov and Kulibayev, were done via acquiring overinflated assets. The principal Telia senior executive coordinating the relationship between Kulibayev, Massimov and the Board of Directors in Stockholm was Veysal Aral (“Aral”), KCell’s CEO and a former Ericsson executive, who sources understood to enjoy a cordial relationship with Kulibayev. A Telia source said that, the way the relationship functioned was that Aral first reached an agreement with the Kazakh politicians and then would convince Telia’s Board in Stockholm to approve the different deals. Telia’s Board of Directors was aware of the way things were done by Aral in Kazakhstan and did not oppose to this as long as KCell’s revenues would continue to increase.

From 1992 until 2007 Aral worked at Ericsson in Turkey, where he rose through the ranks to the role of Vice President. In 2007 he was named CEO of GSM Kazakhstan, later renamed KCell. He retained his position at KCell until 2013, when the Board in Stockholm promoted him to the role of Head of Business Area Eurasia. In 2014 he was dismissed from this position.


According to the former official in the Kazakh Agency of Information and Communications, since 2008 Massimov held a number of meetings with Telia’s then CEO Lars Nyberg (“Nyberg”) and Tero Kivisaari, Head of TeliaSonera Eurasia. Preliminary intelligence suggests that the initial contact between Massimov and Telia has been facilitated by Kulibayev, who is also understood to be a beneficiary of Kazakhtelecom and who was already engaged in different deals with Telia in South Asia.

The first documented instance in which Massimov had acted on behalf of Telia was in 2009, when he coordinated the necessary legal arrangements for GSM Kazakhstan to receive a 3G licence. Primarily, a source in the Kazakh government advised that Massimov requested the relevant state agencies to make available the 3G frequency band which the company necessitated. In the second phase of this process, Massimov, in his capacity as the Prime Minister, order the existing legislation on telecoms licences to be amended. Specifically, he has reduced the annual payments required by holders of 3G licences from KZT 2.8 billion (approximately $8.2 million) to KZT 500 million ($1.4 million).

In November 2010 these amendments were signed into law by President Nursultan Nazarbayev (“Nazarbayev”) and in November 2011 GSM Kazakhstan received the 3G licence. A source in the Presidential Administration stated that without Massimov’s support Telia could have not obtained the desired amendments in such a timely manner.



The first questionable transactions of considerable proportion in which Telia has been involved in Kazakhstan date back to 2007 and 2008, when the company acquired two dormant companies for a total consideration of circa $27 million.

According to the 2008 annual report of Fintur Holdings BV (“Fintur”), of which Telia is a majority shareholder, on 20th June 2007 KCell acquired 100% of AR-Telecom LLP (“AR-Telecom”), an entity incorporated on 24th October 2003. AR-Telecom is described in Telia’s disclosures as an entity “which was dormant since establishment”. The purpose of the acquisition, according to the same source, was “to get a WiMAX licence held by AR-Telecom that provides a right to organise wireless radio-access networks over 3.5 MHz spectrum.” According to official Kazakh corporate documentation, AR-Telecom was bought from GSM Telecom, where both Telia and Kazakhtelecom were at the time shareholders.

Fintur’s annual report further says that the “acquisition of AR-Telecom was accounted for as an acquisition of group of assets (licences) rather than a business. […]Total consideration paid for the licences amounted to USD 5,587”. However, according to KCell’s 2012 prospectus, the amount paid for AR-Telecom was KZT 677.8 million, or $5.5 million.

In 2008 Telia paid KZT 2.6 billion, or approximately $21.5 million, for KT-Telecom LLP (“KT-Telecom”), registered on 19th September 2006 in Kazakhstan. KT Telecom was also described as a dormant company and the purpose of the transaction was also obtaining WiMAX licences held by the Kazakh entity. Research into the ownership of KT Telecom is ongoing.


In 2012 state-controlled Kazakhtelecom sold its 49% stake in GSM Kazakhstan to Telia for approximately $1.5 billion and was rebranded KCell. A source in the inner circle of Kulibayev said that it was the Kulibayev who has initially been responsible for the terms of the deal. However, due to Kulibayev falling out with Nazarbayev in 2011, he was replaced by Massimov who finalised the negotiations.

Initially Sonera Holdings BV Telia’s Dutch subsidiary, acquired Kazakhtelecom’s 49% position in GSM Kazakhstan. In December 2012 Telia listed 25% of KCell on the Kazakh Stock Exchange (“KASE”).

A former Telia executive said that this was the first significant kickback paid by Telia to Kulibayev and Massimov. The source understood that Kulibayev and Massimov benefited from the overinflated price through Bodam and Deran, vehicles through which each was then the beneficiary of Kazakhtelecom. Similar payments were conducted through the acquisition of 20% in KazTransCom and the $175 million payment for WiMAX licences.


In December 2012 Telia announced it would acquire KazNet Media LLP (“KazNet Media”), a Kazakhstan-registered telecoms company for a consideration of $170 million. The seller was Midas Telecom, the company’s sole shareholder, which was wholly-owned by Mymari Holding BV, a Netherlands-incorporated company profiled below. According to Telia’s disclosures, the $170 million figure consisted of a $106 million cash payment and a further $64 million in shareholder contribution. The deal was reportedly concluded on 11th January 2013.3 Kazakh corporate records confirmed that KazNet Media’s current shareholder are Telia’s subsidiaries Sonera Holding BV and TeliaSonera Assignments BV.

Aral and Kulibayev/Massimov understood that the pre-existing corrupt arrangement could not continue when the scandal pertaining to Telia’s corrupt practices in Uzbekistan emerged in the public domain. The decision taken by the trio was to mask one last significant kickback under WiMAX transactions, which was described by the source as a standard method to formalise a bribe. The price which Telia paid, $175 million, was the amount which Aral managed to convince the Board in Stockholm to sign off on.

The most evident indication to support a corrupt relationship in Kazakhstan was that months after the acquisitions of the WiMAX licences in Kazakhstan, Telia’s new management had written off most of its value. In Telia’s 2013 annual report Telia said it had written off the value of companies acquired by SEK 500 million (approximately $58 million). This decision was “based on the view that it will take longer than expected to achieve full use of the acquired frequencies due to the current lack of a 4G license.” Telia’s CEO Nyberg resigned on 1st February 2013.

KazNet Media was founded on 31st March 2009 in Almaty under Business Identification Number (BIN) 090340020625. Together with the acquisition of KazNet Media Telia stated it had received ownership over Aksoran LLP (‘‘Aksoran’’) and Instaphone LLP (‘‘Instaphone’’), two Kazakh companies each of which was said by Telia to have owned certain radio frequency permits capable of being deployed for the operation of Telia’s future WiMAX activities in Kazakhstan.

Instaphone was incorporated on 11th April 1997 in Almaty under BIN 970440001647. Kazakh corporate records indicated the company’s sole shareholder to be KazNet Media.

Aksoran was registered on 7th December 2001 under BIN 011240000487 and its sole shareholder is Alem Communications Holding LLP (“Alem”). The latter was incorporated on 23rd December 2008 in Almaty under BIN 081240013967. According to Kazakh corporate data, its shareholders are Midas Telecom and Mymari Holding BV (“Mymari Holding”).

Mymari Holding is a Netherlands-incorporated company registered on 14th June 2007 in Amsterdam under company number 818136364 and is the sole shareholder of Midas Telecom. Mymari Holding is wholly-owned by Rimbor Holding & Finance BV (“Rimbor”), a company incorporated on 14th June 2007 in Amsterdam. Rimbor’s sole shareholder is Lavita Holding, the entity that featured in the KTC transaction flow.

As detailed above, the latter is currently ultimately owned by Nuriyeva and Klebanov on a parity basis.

Aigul Nuriyeva who, according to the article, helps manage the Nazarbayev family finances

A source in the Kazakhstan Financial Police stated that the WiMAX deal was signed and completed outside Kazakhstan and there was no evidence to suggest that the proceedings have reached bank accounts in Kazakhstan. The banks used for this transaction have, according to the same source, been DHB Bank and Triodos Bank in the Netherlands.


In December 2012 Telia announced that it had finalised the negotiations to acquire an approximately 20% stake in KTC, the Kazakh telecoms services provider. The mechanics of the transaction, which was said to have been completed on 11th January 2013, are outlined below and are also illustrated in a chart accompanying this report.

At the time of the transaction, KTC had the following ownership structure:

Shareholder Stake (%)

TOO Rodnik Ink 79.9

TOO Telekom Asia 9.9

Others (not disclosed) 10.2

Telia acquired a 50% in Alatau LLP (“Alatau”), a Kazakhstan-registered company. Alatau owned a 50% interest in TOO Rodnik Ink, another Kazakh entity, which in turn was a 79.9% shareholder in KTC. Kazakh corporate records indicate that at the time of the transaction, Alatau’s sole shareholder was Sagdiyeva, whom sources identified as a person close to both Kulibayev and Massimov. Sagdiyeva started her career at Halyk Bank and in the early 2000s, when Kulibayev acquired local investment company Merkury 1999, Sagdiyeva became its CEO. The information pertaining to the fee paid by TeliaSonera to Sagdiyeva was indicated in Telia’s annual accounts to have been $22.5 million. The press, however, reported it to be in the region of $35 million.

At the same time Sagdiyeva sold the remaining 50% shares in Alatau to Lovou BV, a company registered on 25th April 2005 in the Netherlands under company number 814471249. Lovou’s sole shareholder is Panorpa Holding BV, which is owned by Visor Growth Fund BV. The latter entity is understood to be part of the Visor Group of companies controlled by Kulibayev. Visor financed its acquisition of the stake in Alatau through a SEK 182.5 million (approximately $22.5 million) loan provided by Telia. The loan has never been re-paid.


At the time of Telia’s acquisition of KTC, the remaining 50% shares in TOO Rodnik were owned by Almaty Engineering Company LLP (“AEC”), the sole shareholder of which was identified by Kazakh corporate records as Abdukalyk Nalibayev (“Nalibayev”). Nalibayev previously served as Massimov’s deputy at both Halyk Bank and also in the government. In October 2012 Nalibayev sold his shares in AEC to Lavita Holding BV (“Lavita Holding”), an entity registered in the Netherlands, for a fee of $51 million.

Lavita Holding was incorporated on 5th May 1997 in Amsterdam under company number 806125792. Dutch corporate records indicate that from 10th December 2008 until 22nd December 2011 Lavita’s sole shareholder has been Nuriyeva. On 22nd December 2011 Nuriyeva transferred ownership of its shares to UNA SCA (“UNA”), an entity registered on 21st December 2011 in Luxembourg under company number B166810. As of 2015 the company is in voluntary liquidation.

Luxembourg corporate records identified UNA’s original shareholders as UNA Management S.a.r.l. (“UNA Management), a company incorporated on 3rd February 2012 in Luxembourg under company number B166810, and Panev SA (“Panev”), a vehicle established on 12th August 1992 in Luxembourg under number B41036. On 23rd August 2013 Kauz Services S.a.r.l. (“Kauz Luxembourg”) became UNA’s third shareholder following an increase in share capital.

Kauz Luxembourg was established on 16th December 2011 under company number B166778. According to available corporate records, until 5th February 2015 when Kauz Luxembourg was liquidated, the company’s sole shareholder has been Nuriyeva.

UNA Management has been wholly-owned by Panev since its incorporation until 2012, when Panev transferred 50% of its stake in UNA Management to Nuriyeva, and the remainder 50% to Pieter Hamelink (“Hamelink”), a fiduciary known for his services to members of the Kazakh elite.

Further, on 19th November 2014 Hamelink transferred his stake in UNA Management to Keisecker, which appears to be the current shareholder.

According to information held by the Luxembourg corporate registry, Keisecker was incorporated on 22nd December 2011 under company number B166777. At incorporation its sole shareholder was Alexander Klebanov (“Klebanov”), a Kazakh national born on 27th April 1963. No information was found to suggest that the company’s ownership structure has changed since incorporation. Klebanov is a prominent Kazakh businessman best known as a major shareholder of the Central-Asian Power Energy Company. According to a source in the Presidential Administration, Klebanov is known to hold other interests on behalf of Massimov. The source indicated that he manages Massimov’s media portfolio, which is understood to include news website Vesti.kz and radio station Tengri FM.


A source close to Nalibayev said that the latter sold the 50% stake in Rodnik upon instructions he had received from Massimov, who needed to legalise $51 million which he then provided to Kulibayev as part of the $235 million acquisition from Turquoise Hill Resources of a 50% stake in Altynalmas Gold Ltd (“Altynalmas”). The latter owns the Kyzyl gold project in North-eastern Kazakhstan.

According to information held by the Kazakh Stock Exchange (“KASE”), after the transaction, the ownership structure of Altynalmas was as follows:

Shareholder Stake (%)

Sumeru Gold BV 50.0

Sumeru LLP 50.0

Sumeru Gold BV was established on 1st February 2013 in Amsterdam under company number 852454922. According to the Dutch corporate registry, Sumeru Gold BV is wholly-owned by Steppe Unity Cooperative UA. Sumeru LLP is a Kazakhstan-registered company incorporated on 28th December 2014. It is wholly owned by Aquila Properties Investments BV. According to reports in the mainstream business press, Kulibayev is the beneficial owner of Sumeru and Aquila.

This is supported by the fact that both Aquila and Sumeru Gold BV has listed as one of their administrators Olga Aristova (“Aristova”), a Kazakh national born on 8th August 1973. Aristova was previously named in the Russian press as Kulibayev’s trusted manager.

Terra Management

In 2011 Rodnik was a shareholder in TOO Terra Management, a company founded in Almaty on 6th June 2007. In 2012, one year prior to the acquisition by Telia, the ownership of Terra Management was transferred to Dekcon Services BV (“Dekcon”), a vehicle registered in the Netherlands on 22nd August 2011, whose sole shareholder is Luxembourg vehicle Verbela Participations SA (“Verbela”) which was incorporated on 18th June 2010 under company number B153691. The ultimate beneficiaries of Verbela were not established. However, the method in which the company is owned – Dutch and Luxembourg entities – is in line with the method in which Nuriyeva and Klebanov own the majority of the companies.

TOO Telekom Asia

TOO Telekom Asia (“Telekom Asia”) was registered in Kazakhstan on 6th December 2012. Its sole shareholder is Bleston Finance Ltd (“Bleston”), a vehicle registered in the BVI. It was not possible to ascertain Bleston’s ownership structure as BVI-domiciled companies are not legally obliged to disclose shareholder information. In KTC’s 2015 annual report, Telekom Asia is no longer listed as a shareholder. The company appears to have transferred its stake to Murat Abdrakhmanov, KTC’s CEO.

A former Telia senior executive said that Veysal Aral (“Aral”), a Telia Vice President, was also a beneficiary of KTC.


Sources indicated to the fact that the KCell senior management were siphoning significant funds from the company’s books through payments for fictious services. The recipients, according to two Telia senior executives, were both Kazakh political figures and KCell senior management.

The Ericsson Connection

One Telia and one former KCell senior executive concurred that the majority of the service contracts were conducted with the collaboration of old acquaintances of Aral from Ericsson in Kazakhstan.

The most regularly-occurring scheme in which the low level kickbacks were paid were the contracts between KCell and Ericsson, where the former subcontracted Ericsson to conduct monthly inspections of its antennas. Then, Ericsson formally outsourced these services to shell companies which were used to divert the funds. The inspection of one antenna, for which KCell paid circa $2,000 per month – described by one source as ten times exceeding the average cost of the service – was never carried out and the funds ultimately reached either Kazakh politicians or KCell senior management.

This is supported by information published available in the public domain. The implication of Ericsson was initially flagged up in 2011 by Turkcell, a minority shareholder in KCell. Telia later announced that it would investigate the matter. In February 2015, KCell requested the General Prosecutor’s Office of Kazakhstan to open a criminal investigation into several of its senior management on similar grounds. No further information was reported. It is understood that KCell suspected the culprits to be former General Director Ali Agan and Financial Director Baurzhan Ayazbaev, both of whom resigned in 2014.

The shell companies used in the embezzlement of funds were understood to have included Kazakhstan-registered entities:

 Micro Engineering LLP was incorporated on 24th July 2007 and since 2014 has been under special administration following bankruptcy proceedings initiated against it. In 2011 the company was owned by Mohammed Agbulut, identified by the Kazakh press as an erstwhile acquaintance of Aral.

 GSM Tech Management LLP was founded in Almaty on 27th January 2009. It is currently owned by an individual named Kadyr Yusupov. Previous shareholders included Aleksandr Yakovenko and DatCom Resources Ltd, a company incorporated in the BVI.

 Micro Wireless LLP, was incorporated in Kazakhstan in 2008 and is owned by an individual named Ozturk Orchun.

This feature forms the basis of continuing research on the topic by a group of independent researchers and academics including researchers who worked on previous investigation regarding Swiss repatriation of laundered money from Kazakhstan whose final report will be published in due course.

Related investigation on TeliaSonera and Gulnara Karimova, daughter of Uzbekistan’s former President Islam Karimov. (1991–2016). Subsequently, the United States Department of Justice launched.

A Dance With The Cobra
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