When British parliamentarian Margaret Hodge rose to her feet in January 2022 and called for Kazakhstan’s oligarchs to be sanctioned by the UK government, there was one curious omission: Nurzhan Subkhanberdin.
It was a surprising exclusion given the serious allegations levelled at the Kazakh banking magnate: he stands accused of illegally extracting millions of dollars from the bank he ran and ploughing the cash into his own private investments. Such a scheme would normally attract the attention of anti-kleptocracy policy-makers. Indeed, the oligarch’s business partner and former oil minister Sauat Mynbaev was named and shamed by Hodge. But Subkhanberdin, a master of flying below the radar, went completely unmentioned.
Subkhanberdin has spent decades becoming one of Kazakhstan’s richest men in near-total anonymity. Best known for founding and heading Kazakhstan’s largest bank Kazkommertsbank (KKKB), Subkhanberdin has also invested in oil, gas, telecoms and media. But his stealthy rise through the business world has gone mostly unnoticed.
A bare-bones Forbes profile estimates Subkhanberdin’s wealth, as of 2011, to be $1 billion and he has certainly not shied away from spending such vast riches. Records show that his villa, nestled on a private island along the French Riviera, is worth up to $50 million. He also owns a palatial 11-bedroom central London mansion valued at more than $25 million, as well as a EUR 4.5 million yacht, a private jet and an apartment in Monaco worth up to $20 million. On top of that, until recently he owned two penthouses in New York worth a combined $20 million.
Sunkhanberdin’s website proudly declares that he founded Kazakhstan’s private banking system and that he is “recognised as a solid symbol of self-made success and entrepreneurship for all generations of businessmen in Kazakhstan”. The website waxes lyrical about his charitable efforts while dispelling myths that he relied on the patronage of Kazakhstan’s despotic ex-president Nursultan Nazarbayev to achieve success. “His open support of promoting democracy in the country coupled with his independent financial success became to be considered a potential source of threat to the ruling circle’s regime in the country,” it states.
Subkhanberdin certainly enjoyed a brief flirtation with opposition politics in Kazakhstan. He was initially a member of party Democratic Choice of Kazakhstan (DCK) which he founded in 2001 with Kazakh fugitive Mukhtar Ablyazov, later convicted of embezzling billions of dollars from a Kazakh bank, and businessman Bulat Abilov. When Nazarbayev cracked down on DCK, however, Subkhanberdin joined the more moderate Ak Zhol party and became its main financier.
Subkhanberdin’s personal website attributes all his wealth to the sale of his stake in KKB. But nowhere on the site does he mention another sources of his vast wealth, Meridian Capital. Unsurprising perhaps given Meridian was the focus of a months-long investigation by the Organised Crime and Corruption Reporting Project (OCCRP). Under the headline “Kazakhstan’s Secret Billionaires”, OCCRP revealed how Subkhanberdin with the help of a cast of other uber wealthy Kazakhs extracted millions of dollars from KKB and invested the money into hundreds of private ventures. Founded in Bermuda in 2002, Meridian’s growth soon exploded and the firm began paying enormous dividends to shareholders. One of the company’s shareholders, a British banker named Ian Connor, reportedly estimated in 2005 that Meridian had assets of $1.2 billion and claimed he received $9 million in dividends the previous month alone.
According to the investigation, based on a leak of millions of confidential documents from the Bermuda law firm Appleby, Meridian invested KKB money into everything from a Russian dairy farm to some of Kazakhstan’s largest oil fields. When the investments paid off, Meridian pocketed the profits but if they flopped, the bank owners and executives – among them Subkhanberdin and Nina Zhussupova, another Meridian owner – dumped the losses onto the bank’s balance sheets.
The leaked documents showed that Subkhanberdin had the largest stake in Meridian – 25% – while his partner Mynbayev had 18.75% of shares. Also involved were Askar Alshinbayev, Yevgeniy Feld and Azat Abishev. Mynbaev has faced criticism for what was identified as a conflict of interest given the senior government positions he held at the time. As a result of the scheme, KKB’s growing mountain of bad loans eventually forced the bank to resort to multiple bailouts. In 2010, it obtained $1.4 billion from the Kazakh government and a further $7.5 billion in 2016. Subkhanberdin and Zhussupova were also reported to have violated Kazakh laws that banned owners of offshore companies from holding shares in the country’s banks.
Subkhanberdin and Meridian met controversy again in January 2022 when it emerged that the fund had invested in a property development set to transform the New York skyline. Under the headline “How shady Kazakh cash is building NYC’s poshest pads”, the New York Post reported that “dubious Kazakh cash” from Meridian was funding the construction of 127 “glittering residences” on the Upper West Side and Midtown. According to reports, US real estate development firm Extell Development, run by American businessman Gary Barnett, has filed offering plans for the development.
Also recently, Subkhanberdin has found himself a thorn in the side of the Kazakh government after threatening to take it to court. In April 2021, Victoria Oil & Gas (VOG), a British oil and gas producer partly owned by Meridian, announced plans to sue the Kazakh government. The dispute centres on the Kazakh government’s revocation of VOG’s $8.5 million licence in a Kazakh oil field called Kemerkol. While the status of the dispute remains unclear, VOG continues to claim on its website that it will “fight for our position within the constraints to the Kazakh legal system and remain hopeful for a positive outcome”.