August 9, 2021 admin 0 Comments

Payments from Kazakh oligarchs lead to a complaint of suspected money laundering filed with the Swiss Financial Market Supervisory Authority (Finma). A Geneva-based private bank is in the spotlight – not for the first time.

In April, the Swiss Financial Market Supervisory Authority (Finma) received an explosive complaint. According to the plaintiffs, the case concerns highly suspicious transactions associated to a clan of Kazakh oligarchs.

The complaint is based on leaked documents, which were also leaked by the SonntagsZeitung (German newspaper). These documents relate to secret contracts, account information and profiles of people associated to Kazakh politics. According to the lawsuit, the case concerns the alleged money laundering of at least $300 million transferred via complex structures with no traceable business background and on the basis of false documentation. These acts were carried out in order to conceal the beneficial owners behind the funds.

The documents submitted to Finma show payments carried out between 2013 and 2017. However, according to the lawsuit, there is a suspicion that the scheme was already operating since 2007 and is still active today.

Yessimov’s son-in-law plays an important role

The complaint suggests that an important party [in the transactions] is the Geneva-based private bank Compangnie Bancaire Helventique. The bank, which has already been in the headlines in connection to money laundering cases in Venezuela, managed at least 12 accounts on behalf of offshore entities during the period in question, as indicated from the documents. These companies, which had no business activities are, with the exception of two, registered in non-transparent jurisdictions, such as the British Virgin Islands, Panama, Seychelles, the United Arab Emirates and the Marshall Islands.

This network of companies was established by two Swiss consultants who operate a fiduciary company in Schindellegi, Switzerland. This [fiduciary] company is active internationally and holds branches and interests in Dubai, Singapore, Hong Kong, Cyprus, and the Marshall Islands. The two trustees hold directorships in numerous offshore companies.

Akhmetzhan Yessimov is identified in the complaint as the main beneficiary. In the course of his career, the 71-year-old has become the Kazakh Minister of Agriculture, President of Almaty and Chairman of the Kazakh sovereign wealth fund Samruk-Kazyna. He is the nephew of long-time leader [of Kazakhstan] Nursultan Nazarbayev who has also been his personal advisor since April. Nazarbayev was president of Kazakhstan from 1990 until 2019, but as the head of the security council and the leader of the nation, he continues to ‘hold the reins’.

A central role is played by Yessimov’s son-in-law Galimzhan Yessenov. The 38-year-old entrepreneur has a fortune of $500 million, according to Forbes. The martial artist and Ironman athlete was raised in a simple environment. This suddenly changed when at the age of 25 he married Yessimov’s daughter. The same year he took over the Kazakh phosphate producer Kazfosfat through the London-based holding company Kazphosphate for $120 million. The origin of the funds is unclear.

The purchase of Kazfosfat shows how the system functioned and operated.  There is evidence that at the time of the acquisition, $131.6 million flowed via the offshore company Kennon Finance Limited to the London holding company. Documents show that in 2015, $109 million was repaid to Kennon Finance Limited. The London-based Kazphosphate received the money as a loan from Disport International, which is also part of the scheme. The documents also show that Disport International received millions in loans from another offshore company, the Luriato Corporation. Finally, a document from 2017 shows that Luriato Corporation waived repayment of the loan and wrote off the $72 million loan.

The repayment transactions follow a common pattern of money laundering: loans are no longer repaid. A gives B a loan. After a few years A writes off the loan. The big question now is from which sources the money originally came – or where Luriato got the money from. The documents provide no information on this matter.

The Finma-complaint indicates that the funds may have come from two sources: from the sovereign wealth fund Samruk-Kazyna and from the Kazakh ATF Bank. Galimzhan Yessenov took over the bank in 2013. Until its sale in 2019, the bank had to rely on state aid twice because of its exposure to bad loans. The chairman of the bank was a certain Anthony Espina, a Hong Kong-born British citizen. He also became an advisor to Yessimov when he was appointed chairman of the Kazakh sovereign wealth fund. It is interesting to note that ATF Bank was responsible for investing the cash positions of the multi-billion-dollar sovereign wealth fund.

Bank and trustee reject accusations

Upon request, the Geneva-based private bank Compagnie Bancaire Helvetique writes: CBH was at no time informed about the complaint filed with Finma. Although CBH cannot provide any information about existing or non-existing client relationships, it has never conducted any illegal banking transactions. CBH denies all allegations. The Finma did not comment on the case.

One of the two Swiss trustees writes: we only carry out transactions that we are convinced of their legality and which we can execute with the means at our disposal. The company is in no way engaged in money laundering, but rather reports such cases to Money Laundering Reporting Office Switzerland (MROS), if there are any suspicions.

When asked whether the fiduciary company will be prosecuted by the Finma or the self-regulatory organisation Polyreg contacted about the complaint, the trustee did not want to answer.

Compagnie Bancaire Helvetique

The Geneva-based private bank Compagnie Bancaire Helvetique (CBH) has grown significantly in recent years. With 230 employees, it manages 10 billion Swiss francs in client assets, and it most recently achieved net profit of just under 20 million francs.

The bank hit the headlines in relation to the money laundering scandal in Venezuela. According to US investigators, a total of 4.5 billion dollars via Swiss banks were carried out – a significant amount of which via CBH, as the SonntagsZeitung revealed at the beginning of the year. According to account statements, between April 2012 and March 2013, around $2.9 million arrived at a CBH account in about 20 tranches of between $45 million and $500 million. The bank denied any allegations. The presumption of innocence applies.

The bank is majority owned by Joseph Benhamou, who took over the bank ten years ago. A year ago, compliance expert Sabine Kilgus was appointed to the bank’s board of directors. A professor at the University of St. Gallen and a lawyer, she was formerly a member of the board of directors of Finma. Kilgus did not answer an enquiry by SonntagsZeitung on the Kazakhstan case.

This article was initially found on SonntagsZeitung

Suspicious Funds from Kazakhstan flow via Switzerland was last modified: August 9th, 2021 by admin

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