Recalling The Dzhakishev Affair: US Media’s Hillarious Allegations By Twisting Facts

Recalling the Dzhakishev affair: US media’s Hillarious allegations by twisting facts

Wiith the culprit nearing the end of his 14-year prison term for racketeering state assets, the nuclear scam orchestrated more than a decade ago by Mukhtar Dzhakishev who was then at the helm of the Kazakh state atomic enterprise Kazatomprom has made unexpected headlines once more… in the USA. With the “New Cold War” having been used by both sides in the smear campaigns by supporters of candidates Donald Trump and Hillary Clinton, the latter has become the target of accusations of involvement in Dhakishev’s dealings – but not in the way she actually has. That trail leads directly to Kazakhstan’s master-swindler Mukhtar Ablyazov – which US newspapers do not mention but English Royal Court documents do.

Based on information provided by the FBI, a charity fund run by the violation of the Clinton couple during the first decade of the new century was allegedly violating the US so-called RICO law — the Racketeer Influenced and Corrupt Organizations Act of 1971 (codified in the U.S. penal code at sections 1961 et seq.). According to one article posted by the National Review in late October this year, the accusation concerns: “Ostensibly a charity, the foundation was a de facto fraud scheme to monetize Hillary’s power as secretary of state (among other aspects of the Clintons’ political influence). The scheme involved (a) the exchange of political favors, access, and influence for millions of dollars in donations; (b) the circumvention of campaign-finance laws that prohibit political donations by foreign sources; (c) a vehicle for Mrs. Clinton to shield her State Department e-mail communications from public and congressional scrutiny while she and her husband exploited the fundraising potential of her position; and (d) a means for Clinton insiders to receive private-sector compensation and explore lucrative employment opportunities while drawing taxpayer-funded government salaries.”

While dubbing Kazakh President the country’s “ruling despot”, and Vladimir Putin’s government

“Giustra gave an astonishing $31.3 million to the Clinton Foundation and pledged $100 million more. With the Kazakh rights secured, Ur-Asia was able to expand its holdings and attract new investors, like Ian Telfer, who also donated $2.35 million to the Clinton Foundation. Ur-Asia merged with Uranium One, a South African company [it is a Canadian company – ChvdL], in a $3.5 billion deal — with Telfer becoming Uranium One’s chairman. The new company proceeded to buy up major uranium assets in the United States.” Correct – so far, that is. But the authors of the article then make it look as though the purchase that “secured the Kazakh rights” was a fair one instead of a kickback depriving Kazakhstan of billions of dollars in asset value. Presenting Dzhakishev (whose name is never mentioned in the article) as a scapegoat (he himself prefers the usual tune of a “victim of political repression”) is a blatant pack of lies.

A passion for jazz

The real story is far from new and well-known. In April 2009 a member of the Kazakh Parliament used her immunity to take a closer look at the books of KazAtomProm. In this way, Tatyana Kvyatkovskaya found out that Betpak Dala, an offshore holding allegedly personally controlled by the tandem Dzhakishev/Ablyazov, had been sold major stakes in the fields of Akdala, South Inkai and Khorassan for the hilarious total som of 64,000 Kazakh tenge – or 426 US dollar at the time. The buyer was a company called UrAsia, based in Canada and quoted on the Toronto Stock Exchange, but virtuallyunknown among global uranium mining leaders. A tip of the veil was soon to be lifted when it appeared that the man behind the deal, and also behind UrAsia, was Frank Giustra, a Canadian tycoon and personal friend of Bill Clinton, known much less as a mining expert than as a shrewd financial asset speculator. Clinton and Giustra reputedly shared a passion for jazz (they used to play saxophone and trumpet respectively, and sometimes together), for humanitarian work and for plush parties.

The MP passed the information on to the authorities – but not without presenting them at a press conference in the process. The curtain fell for Dzhakishev in the last week of May the following year, when he was sacked as head of Kazatomprom and arrested before he got a chance to flee from the country. But only over the summer, details about his clandestine network of offshore firms started to come out in the open. Among the transactions under investigation figures the Central Mynkuduk deposit, estimated worth in the order of 75 million US dollar in historic value, which was transferred to an offshore shell company called Ken Dala Kz, run by Dzhakishev even though still later it was to appear that the financials were in the firm grip of Mukhtar Ablyazov. The same happened with the nearby Kyzylkum deposit, which was eventually sold to a western-held company called UrAsia for the equivalent of hardly more than a hundred thousand US dollar.

More than just handsome profit

UrAsia in turn saw money pouring in as a result of its kickback deal with Dzhakishev.In 2010 it was bought out by Canada-based global uranium miner Uranium One for $75 million. It was later to be generally assumed that UrAsia in reality paid a lot more for the assets, with the difference having been channeled out of the country by Dzhakishev with the help of BTA’s Mukhtar Ablyazov and the latter’s associates. Following the transactions, Uranium One was to own 30 per cent in the deposit which it bought through UrAsia for the mentioned 75 million dollar. A Japanese consortium in the end owned 40 per cent with the remaining shares in the hands of Kazatomprom.

The assets obtained in Kazakhstan for next to nothing brought Giustra more than just handsome profit. In June 2010 they bartered 19.95 per cent of their common stock against a 50 per cent stake in the operator of the Karatau deposit with Russia’s RosAtom subsidiary Atomredmetzoloto (ARMZ). “Uranium One has signed a definitive agreement to acquire a 50% interest in the Karatau Uranium Mine in Kazakhstan from ARMZ,” a press release dated June 15 was to read. “The purchase price will be paid by way of the issuance of 117 million common shares of Uranium One and a cash payment of $90 million (or equivalent promissory note). The agreement also provides for a contingent payment to ARMZ of up to $60 million, payable in three equal tranches over the period between 2010 and 2012 subject to certain post-closing tax related adjustments. The transaction is valued at approximately $451 million, based on the closing share price of Uranium One on June 12, 2009. […] Upon closing of the Karatau acquisition, ARMZ will hold an indirect 16.6% interest in Uranium One. ARMZ has agreed to a standstill covenant under which it may not, without Uranium One’s prior consent, for a period of at least five years from closing acquire more than 19.95% of Uranium One’s outstanding common shares.” On November 16 the same year, the Kazakh government reportedly approved the deal, which was eventually clinched on December 15.

Kazakstan’s champion fraudster

It meant that neither Nazarbayev nor anyone else within official Kazakhstan (let along Putin whom the article in The National Review also invokes as included conspirator) had been privy to Giustra’s deal, though in fact the state sufferd considerable losses from it. A the other end of the kickback string there were names few people in Kazakhstan like to be thought connected with. One stumbled on in inquiries was that of Rakhat Aliyev, whose name in spite of his suicide still sends shivers down many a Kazakh spine. The other one has been sitting for years in a French jail waiting for his eventual extradition to the Russian Federation where he is wanted for asset swindle, money laundering and a series of related offences. His name is Mukhtar Ablyazov, widely considered Kazakstan’s champion fraudster whose bait counts itself in billions of greenbacks.

Prosecutors at the time they were elaborating on the Dzhakishev case were reportedly looking into the sum of $670,000 which at one point disappeared from BTA’s accounts only to pop up at the local account of Kazatomprom’s Vienna office. That office used to headed by the spouse of Vadim Koshlyak, a close associate of Rakhat Aliyev, then Kazakhstan’s ambassador to Austria before he was to be disclosed not only as a straightforward gangster but also as having prepared an armed coup in Kazakhstan. According to Kazakh news media, the mother of Elnara Shorazova, whom Aliyev married after his imposed divorce from President Nursultan Nazarbayev’s eldest daughter Dariga, was later appointed as the head of this office. As for Koshlyak, he was to be on trial in Vienna, accused of having murdered two Kazakh bankers in 2007 under supervision of Rakhat Aliyev. The trial became a charade and Koshlyak and his fellow-defendant were acquitted. Aliyev had shortly before the opening of the trial hanged himself in a Viennese prison.

“Never specifically identified””

The Aliyev-connection has not been followed up on ever since. But tracing the role of that other notorious Kazakh representative of the global league of long-fingered gentry Mukhtar Ablyazov shed a lot more light on the Giustra affair than (already misleading) information on it spread by The New York Times back in 2008. “The [New York] Times says Kazatomprom, the state-owned uranium company, controlled the properties in which Giustra invested,” Forbes noted in a report posted the next year. “Not exactly true. In the major purchase (Akdala and South Inkai) that cost Giustra $350 million, 70% was owned by Mukhtar Ablyazov, a Kazakh banker; only 30% belonged to the state. Even as to the Kharassan property, which was 70% owned by Kazatomprom, the state company did not sign the agreement by which Giustra’s company, UrAsia Energy Ltd., acquired a 30% interest for $75 million. The seller in the Kharassan deal was Jeffcott Group Ltd., a private company incorporated in the British Virgin Islands.” The next question raised here is: who was behind Jeffcott? “Uranium One owns a 30-per-cent stake in the Kyzylkum joint venture, which was purchased for $75-million (U.S.) in 2005 from a privately held company, Jeffcott Group Ltd.,” a report by Canada’s leading daily The Globe and Mail published on May 29, 2009, would read. “But the Vancouver firm says the shareholders behind Jeffcott were never specifically identified, nor does it know how Jeffcott initially obtained rights to the project.”

In other words: suggestions that the Clintons “fixed Giustra a deal” in Kazakhstan may well be true in themselves but it had nothing to do with either the President or his Russian peer (ARMZ only entered the agenda in 2009, year after Giustra made his kickback deal), and everything to do with mining concession holdings and their offshore proxy firms controlled by Mukhtar Ablyazov, who apparently framed Dzhakishev for it to divert attention from himself, since back in 2006 his fund diversion schemes in which he funneled at least  billion greenbacks from his bank BTA to offshore firms under his personal ultimate control were in full swing.

“According to a Bloomberg report citing the Kazakh National Security Committee, Muktar Dzhakishev allegedly embezzled government property when he “illegally” sold state-owned uranium mining rights to foreign companies and transferred the proceeds to offshore corporate entities. Mr. Dzhakishev and Mr. Ablyazov were accused of forming UrAsia London Ltd. and Jeffcott Group Ltd. which in turn created the joint ventures TOO Kyzylkum and TOO Betpak Dala, to which Mr. Dzhakishev was accused of secretly transferring state-owned mining rights to the Kharasan Akdala and South Inkai uranium deposits. The deposits in question were said to contain more than 200,000 metric tons of uranium worth tens of billions of dollars. It was reported that Frank Giustra, a Canadian billionaire mining investor purchased the mining rights held by the joint ventures. The titular seller was Mr. Ablyazov, who reportedly received $350 million through holding companies he controlled in Cyprus and the British Virgin Islands. According to the Globe and Mail, UrAsia was later acquired by Uranium One,” in the words of a report filed years after the affair came into the open by the World Bank’s Stolen Asset Recovery Initiative (StAR).

Just a link in the chain

The affair has also popped up in the trials against Mukhtar Ablyazov and a number of his associates downtown London, ending on February 16 2012 in a verdict condemning Ablyazov to 22 months in prison for “contempt of court” – a British equivalent for perjury – along with a freezing order of all ”his” (read: stolen) assets worldwide, ruled by Justice Teare and later confirmed in appeal. Earlier, Ablyazov’s former associate and brother-in-law Syrym Shalabayev who appears to have played a key role in the Giustra-related scam had been found guilty of the same offence and sentenced to 18 months imprisonment in consequence. “He has not served his sentence and is currently abroad,” one ruling by Justice Hamblen concerning the Ablyazov files by Justice Teare’s colleague Justice Hamblen reads. “Since it is Mr. Ablyazov’s case that Syrym Shalabayev is the owner of Carlton House, Oaklands Park, the flat in Elizabeth Court and FM Company.”

The report relates Shalabayev’s career as follows. “He was born in 1969 in Kazakhstan and graduated from the Kazakh State University in Almaty in 1997 with a law degree. In addition to trading in commodities (exploiting price differentials between different regions in Kazakhstan) he imported cars into Kazakhstan from Russia and owned ‘a number of shopping centres’. He was also involved in the recovery of minerals (mainly manganese ore) and the supply of petroleum products. He owned ‘a few fuelling stations and petroleum product storage facilities.’ […] When Mr. Ablyazov was imprisoned in 2002 Syrym Shalabayev took Mr. Ablyazov’s wife and children to London.” He also was to escape with Ablyazov in the course of justice and end up in Lithuani where he was recently granted political asylum…

English court documentation provides proof, though rather circumstantial, that Ablyazov and his associates have been far more directly involved in Mukhtar Dzhakishev’s dealings than at the time assumed. “In that year [2003], on 14 August, [Shalabayev] founded a company which secured a contract to form a joint venture with the Government of Kazakhstan which was anxious to invest in the uranium industry. His company was to invest ‘at least US$2m’. The price of uranium increased. […] Mr. Ablyazov advised him to sell and offered to find an investor in return for 30% and if the price was more than US$50m. the excess would be split 50/50. […]  ‘Changing the ownership structure’ […] involved transferring his interest in the joint venture to an off-shore company owned by another off-shore company Widley Worldwide of which Mr. Syrym Shalabayev was the UBO [ultimate beneficiary owner]. On 7 November 2005 he sold his uranium business to Urasia Energy Limited for US$350m. This was his ‘biggest transaction’. Mr. Ablyazov was entitled to US$160m. of the sale proceeds.” Widley Worldwide was just a link in the chain. The nominal seller was a private Kazakh company called TOO Investment Company Astana. That company was owned by a Cypriot company which was in turn owned by a BVI company Widley Worldwide Inc. The name Jeffcott does not appear in any English court document related to the case. But since holders of assets through which Ablyazov’s stole BTA funds were laundered changed names almost by the month, the relation is not hard to imagine.

Who is the biggest “traitor”?

Does all this mean that Hillary Clinton has been correctly accused of involvement in asset racketeering, even if just as proxy? It may well be so – but not in the sense US media try to present insinuations as facts these days. “As the Russians gradually assumed control of Uranium One in three separate transactions from 2009 to 2013,” a fresh article posted in late October this year amidst the heat of the election campaign’s mutual mud-throwing ritual in The New York Times reads. “Canadian records show, a flow of cash made its way to the Clinton Foundation. Uranium One’s chairman used his family foundation to make four donations totaling $2.35 million. Those contributions were not publicly disclosed by the Clintons, despite an agreement Mrs. Clinton had struck with the Obama White House to publicly identify all donors. Other people with ties to the company made donations as well. And shortly after the Russians announced their intention to acquire a majority stake in Uranium One, Mr. Clinton received $500,000 for a Moscow speech from a Russian investment bank with links to the Kremlin that was promoting Uranium One stock.”

“The path to a Russian acquisition of American uranium deposits began in 2005 in Kazakhstan, where the Canadian mining financier Frank Giustra orchestrated his first big uranium deal, with Mr. Clinton at his side,” the article reads further down. Within days of the visit, Mr. Giustra’s fledgling company, UrAsia Energy Ltd., signed a preliminary deal giving it stakes in three uranium mines controlled by the state-run uranium agency Kazatomprom. If the Kazakh deal was a major victory, UrAsia did not wait long before resuming the hunt. In 2007, it merged with Uranium One, a South African company with assets in Africa and Australia, in what was described as a $3.5 billion transaction. The new company, which kept the Uranium One name, was controlled by UrAsia investors including Ian Telfer, a Canadian who became chairman. Through a spokeswoman, Mr. Giustra, whose personal stake in the deal was estimated at about $45 million, said he sold his stake in 2007.” Here, the timeline is slightly wrong: that was before Russia showed readiness to purchase the assets squandered by the Ablyazov/Dzhakishev tandem, and ARMZ did not finalise the purchase of the Kazakh assets until 2010. But then, such inconsistencies are apparently justified by the slander exchange that characterises America’s version of democracy: who is the biggest “traitor” where it comes to serving post-Soviet statesmen, the world’s bogeymen according to America’s hysteria-sowing media. Just to remind our readers: Kazakh policemen do not shoot citizens dead by the week, in contrast to their American colleages…

by Charles van der Leeuw

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