oDR: Investigation

Kazakh leader’s grandson under McMafia order was mystery client at collapsed London ‘golden visa’ firm

UK accused of allowing ‘oligarchs to come and go with impunity and stash their cash here’

Marcus Leroux Thomas Rowley
21 January 2022, 8.03pm
221B Baker Street, home of both a fictional famous detective and some real-life mysteries
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Elliott Brown, CC BY 2.0

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, openDemocracy and SourceMaterial have learned.

Dolfin Financial went into administration last year after the Financial Conduct Authority (FCA) 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 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 Kazakhstan regime, whose leaders have become spectacularly rich from the country’s abundant oil, gas and metals. Much of that wealth is stored in the UK: a previous SourceMaterial investigation revealed that Aliyev’s mother, Dariga Nazarbayeva, was the secret owner of iconic properties on London’s Baker Street worth £140m.

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“UK law is still riddled with loopholes that enable oligarchs 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.

As a Nazarbayev family member, Aliyev, now 37, experienced a considerable rise in status during his late teens and early 20s – becoming the head of Kazakhstan’s largest sugar producer at 19, and head of one of the country’s largest banks at 22.

Dolfin was evasive about its relationship with Aliyev when questioned, according to the FCA. This is significant because foundations he owned had been subject to an Unexplained Wealth Order, popularly known as a ‘McMafia order’ after a book about Russian oligarchs by Misha Glenny. The measure allows a court to require an individual to account for the origin of their wealth, paving the way for British authorities to seize assets if there is no legitimate source of cash.

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

The company hired a crisis management consultancy to prevent it being publicly linked with the client, while a staff member was instructed to scrub any references connecting it 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, after a judge found the National Crime Agency’s claim regarding it was “unreliable”. A SourceMaterial investigation later cast doubt on some of the evidence Aliyev and Nazarbayeva presented to the court.

Speaking at the time, Aliyev said that the National Crime Agency had “pursued a groundless and vicious legal action, including making shocking slurs against me, my family and my country”.

Golden visas

Private wealth management firm Dolfin specialised in securing UK investment visas for wealthy clients. These so-called ‘golden visas’ are intended to help attract entrepreneurs to the UK if they invest at least £2m – but the FCA said that the company used a network of other companies to engineer a system that allowed investors to contribute only £400,000.

In light of the FCA order, the private wealth management firm said in April 2021 that it “was surprised and disappointed” given it had made “huge efforts... to de-risk the business, change Dolfin’s culture and business model and to ensure that the business is conducted in a fully compliant manner”.

There is widespread concern that golden visas are open to abuse. The FCA also censured Dolfin for misleading authorities over its visa work for Chinese clients, while in 2020 a parliamentary committee called for a review of the golden visa programme as part of a report into the threat of Russian interference in British politics.

Court papers reveal that Aliyev applied for a golden visa using his address on The Bishops Avenue, the North London address dubbed ‘Billionaires’ Row’ – though the documents do not specify if he was successful or whether Dolfin facilitated the application.

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

Joukovski’s work for Nurali Aliyev is thought to go back at least as far as 2014, when an entity controlled by the banker began managing a company through which Aliyev owned his £33m Bishops Avenue property.

According to Aliya Nazarbayeva, now 41, 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 $300m 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 settled earlier this month. In the suit, Nazarbayeva accused two of Joukovski’s associates of siphoning off her cash. The associates denied any wrongdoing. Joukovski himself was not a defendant and no allegations of wrongdoing were made against him.

It is understood that Joukovski denies that he ever provided either Aliyev or Nazarbayeva with advice of any kind, financial or otherwise.

Kazakhstan erupted into violence in early January when the government cracked down on peaceful rallies that were triggered by a fuel price hike. The rallies quickly expressed wider anger at an oligarchic regime under which it is estimated 162 people own 50% 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 $78m 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 apparently gifted the ownership of an exclusive private school and two gold mines to a billionaire friend of Nazarbayev. Glencore denies any wrongdoing.

According to Hawley of Spotlight on Corruption, London’s visa regime offers red-carpet treatment for Kazakh oligarchs seeking a haven for suspect money.

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 oligarchs,” Hawley said.

Aliyev and his representatives did not respond to requests for comment. Lawyers for Joukovski said that he had “no material involvement” in the FCA investigation.

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