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Pandora Papers: Kazakhstan and the Offshore Shuffle

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Pandora Papers: Kazakhstan and the Offshore Shuffle

OCCRP’s investigation reveals a payout of $30 million to an alleged unofficial wife of Kazakhstan’s First President.

Pandora Papers: Kazakhstan and the Offshore Shuffle
Credit: Depositphotos

Yet another leak of financial documents reveals how the world’s richest use offshore companies — and the anonymity and deniability they provide — to shift money around. More than 600 journalists collaborated in sorting through the nearly 12 million files from 14 companies providing offshore services, called the Pandora Papers by the International Consortium of Investigative Journalists (ICIJ).

While one top headline focuses on documents linking a woman long alleged to be in a secret relationship with Russian President Vladimir Putin to a luxury apartment in Monaco, other documents suggest the beneficiary of offshore deals between some of Kazakhstan’s oligarchs was one of Kazakh First President Nursultan Nazarvayev’s alleged unofficial wives.

An investigation by the Organized Crime and Corruption Reporting Project (OCCRP), claims that Assel Kurmanbayeva — Nazarbayev’s tokal, or unofficial wife — received $30 million “apparently for almost nothing” after a series of share transfers between six offshore companies linked to two Kazakh oligarchs with close ties to Nazarbayev.

Kurmanbayeva, now 40, won the Miss Kazakhstan beauty pageant as a teenager in 1999 and since has been rumored to be in a relationship with Nazarbayev, now 81. When Rakhat Aliyev, the former husband of Nazarbayev’s eldest daughter Dariga, was feuding with the Nazarbayevs from exile he allegedly shared photos of Kurmanbayeva and her two children’s passports. The two children’s passports listed the surname “Nursultanuly,” which customarily would suggest their father’s name was Nursultan. In 2015, Aliyev died in an Austrian jail, allegedly by suicde.

Kurmanbayeva, as OCCRP’s report notes, is currently the artistic director of two state-run dance institutions and owns several firms involved in dance but seems to have received a boost with a $30 million payout from a trade of shares in several offshore companies involving two Kazakh oligarchs: Vladimir Ni and Vladimir Kim. 

Ni, an ethnic Korean born in Soviet Russia’s Far East, died in 2010 and was said to be one of Nazarbayev’s “longest serving and most faithful associates.” Ni was involved in the privatization of Kazakhstan’s mining industry in the mid-1990s, bringing into the elite fold a younger ethnic Korean, Vladimir Kim. Ni retired from government service in the later 1990s, joining the board of Kazakhmys — the mostly private Kazakh mining giant. Kim became the company’s president. They traded off the chairmanship. When Kazakhmys when public in 2005, it was revealed that Kim was its largest shareholder at 39 percent.

Where the two Vladimirs and Kurmanbayeva intersect is in a series of share trades between six offshore companies, in particular the British Virgin Islands (BVI)-registered EMES Holding & Finance, in which Ni became the shareholder in 2008, and Landra Services, another offshore company. Kurmanbayeva was a partner in EMES and her shares were transferred to Landra Services. It’s not clear that either “company” actually did any kind of business. Following Ni’s death, Kurmanbayeva sold Landra Services to Ni’s family — cashing out for $30 million. Kim was a signed witness to the deal.

OCCRP includes in its report an excellent graphic illustrating the staged shift of shares that set up the eventual payout for Kurmanbayeva.

Central Asia’s elites are no strangers to the utility of offshore companies for shuffling and hiding money. Often offshore companies are used to purchase real estate; the labyrinth of obscured ownership helps hide both criminality and greed in equal measure.