Famous Kazakh oligarch and businessman Timur Kulibayev, married to the middle daughter of the first president of Kazakhstan, Nursultan Nazarbayev, is the republic’s largest taxpayer among all individuals. According to the Ministry of Finance of Kazakhstan, over the past 5 years, the amount of income tax withheld from Kulibayev amounted to more than $ 3.1 million.
This information was made public by Kazakhstani Member of Parliament Pavel Kazantsev. On June 17, he made an official request to the Prosecutor General of Kazakhstan Gizat Nurdauletov, in which he raised issues related to the mechanisms of oil and gas export:
“The oil industry, providing employment, local content, and tax payments to the budget, is one of the key and significant for the state economy. Recently, various issues have been raised in Internet publications related to the mechanisms for selling oil and gas for export, the activities of foreign intermediary companies in this area and their access to the domestic market, as well as the issues of targeted spending of funds of foreign subsidiaries of the national oil and gas company. Unjustified publications of this kind entail significant risks of damage to the business reputation of the domestic oil and gas industry, and also negatively affect the country’s investment climate. I ask the General Prosecutor’s Office, in the manner prescribed by law, to provide the deputy corps with answers to the questions posed in the publications and to give an objective legal assessment. I ask to inform on the measures taken in writing within the time frame established by law, ”Kazantsev wrote in his request.
Note that the request refers to several publications that have passed in several different Kazakhstani and foreign media over the past few months. For example, on May 3, the British edition of Talk Finance published an article titled — How a parasite outgrows its host: Daniyar Abulgazin is no longer happy about his role in Kulibayev’s affairs. It tells about an associate of Nazarbayev’s son-in-law Daniyar Abulgazin, nicknamed Khyurrem Sultan (Khyurrem Sultan or Roksolana – the concubine, and then the wife of the Ottoman Sultan Suleiman the Magnificent – ASSA). This nickname for Abulgazin was by no means accidental: everyone who knows him personally calls him an insidious and unprincipled person. The article tells about Dias Suleimenov, the son of Tuleutai Suleimenov, who is a friend and ally of Nursultan Nazarbayev.
“Dias Suleimenov follows in the footsteps of his father. The only difference is that instead of Nazarbayev, he sticks to the president’s son-in-law. Dias Suleimenov has always been in the top management of state corporations and banks. At the age of 24, he was appointed head of one of the departments of the National Bank, with no previous experience. Dias Suleimenov joined Timur Kulibayev, who was considered one of the main contenders for the throne. Daniyar Abulgazin, the brother-in-law of Dias Suleimenov, also joined them. Since then, although Dias Suleimenov and Daniyar Abulgazin officially received salaries from the state, they received hundreds of millions to bank accounts, in the form of shares in companies and real estate. Daniyar Abulgazin and his son-in-law run Timur Kulibayev’s business empire – speculating on the vast and complex bookkeeping of their boss. In return, the relatives provide Timur Kulibayev with their schemes. It was Daniyar Abulgazin who invented much of tax evasion and money-laundering for the Kazakh regime. As an accomplice of Timur Kulibayev, he receives his share of oil and gas revenues. In fact, he is helping his boss to take more and more from public finances, and participate in increasingly risky business. His status as the main conspirator gives him leverage against his own master, ”the newspaper notes.
Another article “Daniyar Abulgazin and a hole in the Kazakhstani Olympic budget” published on the American website The Unfiltered Lens also claims that this trio – Kulibayev, Suleimenov and Abulgazin – made a lot of money selling Kazakhstani oil assets for kickbacks, which were very difficult to track:
“The correspondence between Daniyar Abulgazin and Dias Suleimenov about oil affairs was leaked on the Internet and became the so-called Kazaworld leak. It sheds light on the secretive community around Timur Kulibayev and the golden years of oil affairs. Timur Kulibayev was appointed head of the National Welfare Fund, followed by Daniyar Abulgazin. Abulgazin was the head of the oil and gas industry, including KazMunayGas, the Kazakh state giant. Timur Kulibayev and Daniyar Abulgazin acted in the interests of Vitol Corporation while maintaining their own corporate positions. They allowed the Vitol monopoly to acquire Kazakhstani oil resources for kickbacks provided in a complex scheme to avoid tracking and prosecution. Vitol gained control over the two most important oil fields by providing a loan to KazMunayGas. Raw deal cash gave Vitol privileged access. In itself, there is nothing criminal in this, such things are often practiced in third world countries in need of money. However, the way it was done shows that almost one billion US dollars ended up in the pockets of the Nazarbayev/Kulibayev clan, ”the article says.
The entire scheme, as reported in the publication, is described in the Kazaworld archives. In short, it says that the kickback scheme was based on the creation of a joint venture. It was registered in 2003 by Vitol in Rotterdam. The name of the company is Ingma Holding BV. The company was created to invest in Kazakhstan, but, in fact, the documents of Ingma Holding BV refute this. Daniyar Abulgazin and his group set up a company to rob Kazakhstan of money and bribe local government agencies. The small and seemingly unknown company is a world-class hidden oil trader with billions in sales and revenues. In 2009-2016, the company’s turnover amounted to $ 93.3 billion. This is 1/5 of the total volume of oil exports from Kazakhstan. Ingma announced more than $ 1 billion in revenue paid to shareholders of a private entity, without specifying who they are.
This data is confirmed by the non-profit Swiss organization Public Eye in the investigation “Vitol – the oil king of Kazakhstan”, devoted to corruption in the oil sector. Vitol is the largest private oil trader in the world and the second-largest corporation in Switzerland, whose income in 2017 amounted to $ 181 billion. Today Vitol almost completely owns the Kazakhstani market together with Chinese companies, leaving crumbs of this market to other players.
From 2015 to 2018, Vitol made a masterful move, winning two tenders for loans totaling $ 5.2 billion to the national oil company KazMunayGas. Payments will be made within five years through oil supplies from two of Kazakhstan’s largest fields, Tengiz and Kashagan, which are owned by KazMunayGas. This contract, which is called in professional slang “cash for a dirty deal” or cash for the crude deal, provides Vitol with guaranteed access to Kazakhstani oil and an excellent opportunity to build long-term relations with the state.
However, in the General Prosecutor’s Office of Kazakhstan, respond to an inquiry by Deputy Kazantsev based on these publications, states that the investigation by American and British journalists is not true:
“We have studied the general structure of Kazakhstan oil exports for 2009-2019, including the share of exports of the Vitol Group of companies. It has been established that during this period a total of 752 million tons of oil were exported. At the same time, 482 million tons or 64% of all exports are accounted for by 4 companies (Tengizchevroil, Karachaganak Petroleum Operating BV, North Caspian Operating Company BV, CNPC-Aktobemunaigas JSC) with the participation of such large investors as Chevron, Eni, Royal Dutch Shell plc, CNPC, etc. During the same period, the Vitol Group of companies purchased 75.6 million tons of Kazakh raw materials or only 10% of the total export, i.e. the statement that it occupies the “lion’s” share of the export oil sales market or almost a quarter of the country’s market is not confirmed, “the Prosecutor General’s Office said in a response signed by the acting Prosecutor General Yerlik Kenenbaev.
It also states that all transactions related to the export of Kazakhstan oil are subject to constant monitoring by the Ministry of Finance in terms of compliance with transfer pricing legislation.
“It should also be noted that the facts indicated in the publications, including the circumstances of the involvement of Kulibayev and other persons to allegedly illegal operations with Kazakhstani oil and money laundering, based on the statements of a number of citizens, were investigated by the Swiss prosecutor’s office during 2010-2013. The law enforcement agencies of Kazakhstan, within the framework of providing legal assistance in this case, at the request of the Chief Federal Prosecutor of the Swiss Confederation, granted all the necessary information to facilitate an objective investigation. Following the review of materials, the investigation by the Swiss prosecutor’s office was terminated due to the lack of grounds for criminal prosecution. Thus, the “facts” presented by the authors of several publications in the Western press, regarding violations in the export of Kazakhstani oil, the presence of any collusion, a monopoly position and the granting of unreasonable privileges to the Vitol group of companies, do not correspond to reality, ”assures Kenenbaev.
He also said that the Ministry of Finance of Kazakhstan monitored the taxes paid by large taxpayers, legal entities over the past 5 years.
“The analysis of receipts was formed from among 30 taxpayers of the state and quasi-public sector, as well as groups including affiliated companies directly or indirectly owned by large shareholders with business in Kazakhstan. Timur Kulibayev’s group of companies, whose interests are affected in the analyzed publications, pays taxes at the level of large national companies, such as Kazatomprom JSC, KEGOC, Kazakhstan Temir Zholy, Kazakhtelecom, taken together. Besides, the Ministry of Finance provided information on the payment of taxes by Timur Kulibayev, as an individual, for 2015-2020. Total individual income tax receipts based on annual returns were over $ 3.1 million. An analysis of tax revenues from individuals for this period shows that Timur Kulibayev is in first place in the ranking of the 50 largest taxpayers – individuals in Kazakhstan, ”notes the Acting Prosecutor General.
Recall that Timur Kulibayev, according to the Forbes magazine rating, ranks first in the top 50 most influential businessmen in Kazakhstan. He owns the holding company Halyk Group, which includes Halyk Bank of Kazakhstan, Altyn Bank in Kazakhstan, and AKB Tenge Bank in Uzbekistan. Halyk Bank is also represented in Russia, Kyrgyzstan, Georgia, and Tajikistan. The Halyk Group also includes Mercury Properties, a rental and property management company. Currently, the company’s portfolio includes 39 commercial real estate objects, including logistics centers, shopping, and business centers in Almaty, Nur-Sultan, Atyrau, Aktobe, Aktau, Shymkent, and Dubai. Among them are the Forum Almaty shopping and entertainment center, Lukoil business center in Nur-Sultan, and Kainar in Shymkent. Also, the businessman owns a majority stake in the Singapore-based Steppe Capital Pte Ltd, Viled Group, Joint Technologies, Joint Resources, Caspian Oil, Kazazot. Timur Kulibayev’s fortune is estimated at $ 3.1 billion.
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