According to Forbes, in 2015 Bulat Utemuratov was the richest man in Kazakhstan, with a combined fortune of 2.6 billion dollars. Utemuratov built his fortune simply by acquiring ownership over public enterprises and then reselling them to Western corporations. He was able to do this by being a close friend and advisor to Kazakhstan’s strongman, Nursultan Nazarbayev.
Today, however, is not very clear who used whom. By selling important assets to Western corporations, Utemuratov became financially and politically independent from Nazarbayev, since his money is now in Western banks. Rumors are that he is willing to use his independence to play against Nazarbayev.
His plans to undermine his protector are threatened, though, by his past actions. Utemuratov is involved in a money laundering scheme currently under investigation in the Netherlands.
How it all began
Utemuratov’s career truly began in 1992, when the newly elected president of Kazakhstan, Nursultan Nazarbayev, asked him to go to Vienna to find business partners for the newly independent ex-Soviet republic. A loyal apparatchik, Utemuratov thought that he was being punished into exile. He soon found out that, on the contrary, this was the beginning of a new and very lucrative career – he became in fact Nazarbayev’s right hand.
Within a year after landing in Vienna, Utemuratov helped broker Kazakhstan’s first line of credit, from Creditanstalt. On the side, he was making his first million dollars by buying zinc and copper from Kazakh miners and reselling the metals abroad.
From that point onward, Utemuratov’s wealth began to grow, as did his influence on Nazarbayev, who was eventually proclaimed president for life.
The first two billion
Utemuratov made his first official entrance in the billionaires’ club in 2007, when he managed to sell ATF Bank to UniCredit Bank Austria AG for 2.3 billion dollars, the highest price ever paid for a Kazakh bank.
Utemuratov founded Almaty Trade-Finance Bank CJSC in June 1995. He renamed it ATF Bank JSC in 2002. He used the bank to further strengthen his connections with Nazarbayev’s family: Timur Kulibaev, ATF’s first chairman, is the husband of one of Nazarbayev’s three daughters, Dinara.
The 2.3 billion dollars were channelled into Verny Capital, a Kazakh private equity firm whose lead investor is none other than Bulat Utemuratov. In fact, Verny Capital was created in 2006 primarily to manage Utemuratov’s money.
From rich to richer
In 2011, Verny Capital sold its controlling stake in zinc producer Kazzinc JSC to Glencore International Plc. When Glencore went public, the transaction brought Utemuratov a healthy 3.2 billion dollars.
Given that Glencore, the world’s third-largest family business, has a reputation for unethical behavior, selling Kazzinc to Glencore created quite a stir in Kazakhstan. Several politicians, journalists and activists sent an open letter to Glencore’s investors:
“As representatives of Kazakhstan’s civil society, we are concerned about the above mentioned transactions and suspect that the purpose of these transactions is to disguise a process of money laundering by high-ranking Kazakhstan civil servants.
[…]Bulat Utemuratov, the former Head of Administration of the President of Kazakhstan, is a co-owner of KazZinc. Utemuratov is widely believed to be holding these assets for the benefit of Nazarbayev.”
Money laundering
It appears the Kazakh opposition is right: a money laundering scheme did indeed exist.
The public prosecutor’s office in Zwolle, the Netherlands, opened an investigation on the suspicion that Glencore paid millions of dollars in bribes to Utemuratov. Formally, the investigation runs against a Dutch trustee, who is accused by the authorities of money laundering. In this context, however, it is also about the business of Glencore in Kazakhstan.
At the center of the criminal investigations is a business in which Glencore, through a subsidiary in Nidwalden, has bought Kazzinc shares for over 20 million dollars from an off-shore company in Curaçao, for which the Caribbean company previously paid only 7.7 million dollars. The Dutch prosecutor’s office assumes that the price difference, ultimately at least 5 million dollars, got into Utemuratov’s pockets.
The Swiss authorities are helping the Dutch investigators, who are expected to proceed with questioning soon. If the investigation ends up going to court, it would be the first time that Utemuratov will face exposure of this kind.