Massimov Kulibayev Nuriyeva Teliasonera The Art Of

In light of Karim Massimov receiv­ing the new rank of General Lieutenant, we pub­lish infor­ma­tion on his involve­ment as a hid­den investor in a vari­ety of lucra­tive Kazakh tele­coms com­pa­nies, using his friend Aigul Nuriyeva as the proxy share­hold­er. Through this busi­ness Nuriyeva amassed a for­tune of hun­dreds of mil­lions of dol­lars, though this research high­lights evi­dence to sug­gest that she was not the true share­hold­er, and that the ulti­mate ben­e­fi­cial own­er was Massimov and oth­er mem­bers of the Kazakh polit­i­cal elite. 

This fea­ture forms the basis of con­tin­u­ing research on the top­ic by a group of inde­pen­dent researchers and aca­d­e­mics includ­ing researchers who worked on pre­vi­ous inves­ti­ga­tion regard­ing Swiss repa­tri­a­tion of laun­dered mon­ey from Kazakhstan whose final report will be pub­lished in due course.


 Telia has been active in Kazakhstan since the late 1990s. In order to retain its priv­i­leged posi­tion in the Kazakh mar­ket Telia has engaged in cor­rupt activ­i­ties with senior polit­i­cal fig­ures, name­ly Timur Kulibayev and lat­er Karim Massimov.

 The first seem­ing­ly cor­rupt deals were con­duct­ed in the mid-2000s tak­ing two dif­fer­ent forms. Within Kazakhstan Telia acquired dor­mant com­pa­nies such as AR-Telecom and KT-Telecom for $25 mil­lion. Additionally Telia acquired telecom­mu­ni­ca­tion assets owned by Kulibayev’s Visor Group in Nepal and Cambodia for $484 mil­lion. The real val­ue of those assets was sig­nif­i­cant­ly low­er. One such exam­ple was Applifone, a Cambodian telecom­mu­ni­ca­tions com­pa­ny, on which Telia wrote off $100 mil­lion short­ly of its acquisition.

 In 2012 Telia bought a 49% in GSM Kazakhstan from Kazakh Telecom for $1.5 bil­lion. The price was vast­ly inflat­ed. Massimov and Kulibayev were recip­i­ents through Deran and Bodam, respec­tive­ly, of a large por­tion of Telia’s fee.

 In 2013 and in Telia’s last large cor­rupt pay­ment in Kazakhstan it acquired WiMax licences for $175 mil­lion from enti­ties ulti­mate­ly owned Aigul Nuryieva and Alexander Klebanov, two of Massimov’s prox­ies. The com­pa­nies involved were Lavita Holdings BV and Mymari Holding BV. The $175 mil­lion fee was largest set­tle­ment that Veysal Aral, CEO of KCell and alleged­ly the prin­ci­pal facil­i­ta­tor of Telia’s cor­rupt pay­ments to Massimov, could pass through Telia’s board in Stockholm. Veysal Aral was dis­missed amid alle­ga­tions of cor­rup­tion in 2014.

 In addi­tion to the big tick­et items above Telia and KCell chan­nelled reg­u­lar bribes to Massimov through engi­neer­ing con­tracts via three Kazakh com­pa­nies: Micro Engineering LLP; GSM Tech Management LLP and Micro Wireless LLP. These pay­ments were con­cealed as ser­vice con­tracts for anten­nas in KCell’s net­work which were invoice at $2000 per vis­it; approx­i­mate­ly 10 times the mar­ket rate. To cov­er this scheme in February

2015 KCell peti­tioned the General Prosecutor’s Office in Kazakhstan to ini­ti­ate a crim­i­nal probe into its own executives.

 Some of the illic­it monies paid by Telia to Massimov were used to acquire a 50% stake in the Altynalmas gold mine from Canada-list­ed Turquoise Hill Resources. In par­tic­u­lar Massimov put up $51 mil­lion through Lavita Holding in the deal. In 2014 the mine was sold to Polymetal in the region of $1 billion.




window.tgpQueue.add('tgpli-64a807b147152')Karim Massimov. Kazakhstani Prime min­is­ter at 2010

TeliaSonera’s (“Telia”) engage­ment in Kazakhstan dates back to the late 1990s when the com­pa­ny, togeth­er with Turkcell, acquired a 51% posi­tion in GSM Kazakhstan, a mobile net­work oper­a­tor, in which Kazakhtelecom owned the remain­ing 49%. In 2012, how­ev­er, Kazakhtelecom extract­ed itself from GSM Kazakhstan’s share cap­i­tal by sell­ing its stake to Telia, for $1.5 billion.

In 2007, 2008 and 2013 Telia, sep­a­rate­ly from Turkcell, acquired WiMAX busi­ness­es from Kazakhstan-reg­is­tered com­pa­nies. In 2007 and 2008 Telia paid cir­ca $25 mil­lion for WiMAX licences acquired from AR-Telecom LLP and KT-Telecom LLP. In 2013 Telia acquired WiMAX licences from Midas Telecom LLP (“Midas”) for $170 million.

The same year the com­pa­ny bought a 20% stake in KazTransCom (“KTC”) for a con­sid­er­a­tion approx­i­mate­ly $22.5 mil­lion. The cor­po­rate dis­clo­sures per­tain­ing to the two trans­ac­tions indi­cate that the ulti­mate ben­e­fi­cia­ries of the pro­ceed­ings from the WiMAX busi­ness were Aigul Nuriyeva (“Nuriyeva”) and Aleksandr Klebanov (“Klebanov”), indi­vid­u­als con­sid­ered by sources to be fronts for Prime Minister Karim Massimov (“Massimov”); and Raushan Sagdiyeva (“Sagdiyeva”), a per­son under­stood to have links to both Massimov and Timur Kulibayev (“Kulibayev”). Sagdiyeva was the for­mal recip­i­ent of the $22.5 mil­lion pay­ment. These trans­ac­tions are described in greater detail below.


A for­mer offi­cial in the Kazakh Agency of Information and Communications indi­cat­ed that the exis­tence of a rela­tion­ship between Telia and the Kazakh polit­i­cal estab­lish­ment became appar­ent in approx­i­mate­ly the mid-2000s. In that peri­od Kulibayev was engaged with Telia in South Asia whilst Massimov acquired a pro­por­tion of Kazakhtelecom, then Telia’s part­ner in GSM Kazakhstan (lat­er renamed KCell).

Telia and the Visor Group

Documentary evi­dence of a rela­tion­ship between Telia and Kulibayev’s Visor Group can be traced back to 2008. Between 2008 and 2012, Telia, via sev­er­al sub­sidiaries, had chan­nelled sig­nif­i­cant amounts of cash to Visor, which took the form of acqui­si­tions of the latter’s tele­coms assets in Nepal and Cambodia and loans.

Visor Group entered the South Asian tele­coms mar­ket in the mid-2000s. In 2005 Visor Group entered into an agree­ment with a con­sor­tium of investors led by Upendra Mahato (“Upendra”), a Nepalese busi­ness­man, to estab­lish Spice Nepal, a local mobile provider.

Upendra became acquaint­ed with mem­bers of the Kazakh polit­i­cal estab­lish­ment in the ear­ly 2000s. He has had com­mer­cial inter­ests in the post-Soviet space since the 1990s, when he stroke a part­ner­ship with Aleksandr Milyavsky (“Milyavsky”), a Russian busi­ness­man turned politi­cian. Milyavsky and Upendra report­ed­ly pri­va­tised the Rubin fac­to­ry in Moscow, on the basis of which they devel­oped the famous Gorbushkin Dvor com­mer­cial cen­tre. In addi­tion to Russia, Upendra had report­ed­ly owned busi­ness­es in Belarus.

Upendra ini­tial­ly met Visor rep­re­sen­ta­tives through mutu­al acquain­tances. At that meet­ing Upendra is said to have offered Visor a part­ner­ship in Nepal, where he was in the pro­cess­ing of reg­is­ter­ing Spice Nepal. Visor report­ed­ly pro­vid­ed invest­ment in exchange for a 60% stake in the com­pa­ny. In sub­se­quent years it increased its stake in Spice Nepal and had also entered the Cambodian mar­ket, where it acquired mobile provider Applifone (see below).

Telia’s Acquisition of Visor’s Assets

In 2008 Telia acquired part of Visor’s South Asian tele­coms assets. According to TeliaSonera’s annu­al report, in 2008 its sub­sidiary UTA Holding BV (“UTA Holding”) acquired 51% of the shares in TeliaSonera Asia Holding BV (“Asia Holding BV”), through which Visor owned 80% of Spice Cell and 100% of Applifone. This gave Telia con­trol of approx­i­mate­ly 40% of Spice Cell and a con­trol­ling stake in Applifone. The Dutch cor­po­rate reg­istry stat­ed that the total con­sid­er­a­tion paid by UTA Holding to Visor Group was approx­i­mate­ly $484 mil­lion. Visor Group retained a 49% share­hold­ing in Asia Holding BV. In addi­tion to the acqui­si­tion, UTA Holding’s annu­al report stat­ed that in 2008 the com­pa­ny had pro­vid­ed a loan of $26.5 mil­lion to an undis­closed com­pa­ny, which was iden­ti­fied in an inde­pen­dent inves­ti­ga­tion pub­lished online as an unnamed Visor Group entity.

According to Dutch cor­po­rate records, on 8th December 2010 UTA Holding increased its own­er­ship in Asia Holding BV from 51% to 75.45%, by pay­ing Visor anoth­er $160 mil­lion. The same year Spice Nepal was rebrand­ed into NCell. In December 2015 Telia and Visor sold their 75.45% and 24.55% stakes respec­tive­ly in NCell for $1.03 billion. 

The buy­er was Cambodian tele­coms con­glom­er­ate Axiata Group.

TeliaSonera: 2013 annu­al report, p.27.

Exit from Cambodia

In December 2010 Telia and Upendra agreed to merge their Cambodian busi­ness­es, respec­tive­ly Applifone and Latezl. Telia received a 25% stake in the new ven­ture. In December 2012 Telia divest­ed the invest­ment by sell­ing to Axiata Group. The price paid for 100% of Latezl was in the region of $155 mil­lion. Telia had writ­ten off approx­i­mate­ly $100 mil­lion in good­will on Applifone.

Nepal Satellite

During the course of 2011 and 2012 Telia acquired Nepal Satellite, described in indus­try reports as a small tele­com com­pa­ny with a mar­ket share of less than one per­cent. In 2011 Telia and Visor, via Asia Holding BV, paid $30 mil­lion for a stake in Nepal Satellite. In Asia Holding BV’s annu­al accounts it is stat­ed that the $30 mil­lion was paid for a 51% stake in Airbell Services Ltd (“Airbell”), the Cypriot com­pa­ny own­ing Nepal Satellite. According to his­tor­i­cal records held by the Cypriot reg­istry, the sell­ing par­ty was BVI-reg­is­tered vehi­cle Zhodar Investments Ltd (“Zhodar Investments”).

Asia Holding BV’s annu­al report stat­ed that in 2012 the com­pa­ny “sold and trans­ferred” its invest­ment in Airbell. Cypriot records state that the trans­fer was done to TeliaSonera Norway Nepal Holding AS, anoth­er Telia sub­sidiary. According to Telia’s annu­al report, on 26th April 2012 Telia bought the remain­ing 49% in Airbell, which brought Telia’s stake in Nepal Satellite from 50% to 75%. Telia booked a good will of SEK 1.2 bil­lion ($157 mil­lion). In September 2013, Telia divest­ed Airbell by sell­ing its stake back to an enti­ty named Zhodar Investments at a declared loss of SEK 389 mil­lion ($60 million).2 Telia explained its deci­sion to sell the busi­ness by quot­ing “reg­u­la­to­ry uncer­tain­ty”. The ben­e­fi­cial own­er­ship of Zhodar Investments was not estab­lished and research did not find any oth­er links that would direct­ly lead to Kulibayev or Massimov.

Archives of the Cypriot cor­po­rate reg­istry indi­cat­ed that local com­pa­ny Anu Oil Ltd (“Anu Oil”) was in 2008 the sole share­hold­er of Airbell. Sources said that Anu Oil was Samata Prasad (“Prasad”), an Indian busi­ness­man. Prasad is a long­stand­ing part­ner of Upendra and Milyavsky.

Dutch cor­po­rate records do not dis­close the cur­rent own­er­ship struc­ture of Asia Holding BV, the hold­ing com­pa­ny for Telia and Visor’s assets in Asia. From 1st September 2008 until 1st October 2008 the company’s sole share­hold­er was Netherlands-reg­is­tered enti­ty SEA Telecom Investments BV (“SEA Telecom”), a vehi­cle incor­po­rat­ed on 30th July 2008 whose sole share­hold­er is Panorpa Holding BV (“Panorpa Holding”). Panorpa Holding is whol­ly owned by Visor Growth Fund BV.

Between 30th July 2008 and 8th July 2011 SEA Telecom was owned by Alkatento Trading Ltd (“Alkatento”), a com­pa­ny reg­is­tered in Cyprus on 5th June 2008 and dis­solved on 21st October 2015. Alkatento’s share­hold­er at liq­ui­da­tion was BVI-reg­is­tered ASIA Telecom Grouping Ltd and its direc­tor was Kazakh nation­al Shyngys Utepov. The company’s past share­hold­ers includ­ed Meridian CIS Ltd. The lat­ter com­pa­ny appears to be affil­i­at­ed with Meridian Capital Ltd, the invest­ment fund wide­ly acknowl­edged to have been pre­vi­ous­ly con­trolled by Kulibayev and Kazakh busi­ness­man Nurzhan Sukhanberdin.


window.tgpQueue.add('tgpli-64a807b147160')Goga Ashkenazi with Timur Kulibayev 

The rela­tion­ship between Telia and the Kazakh gov­ern­ment has been ini­tial­ly chan­nelled through Kulibayev. In approx­i­mate­ly 2011–2012, how­ev­er, Massimov took charge. A source in the Presidential Administration of Kazakhstan said that this was due to Kulibayev’s fall­out with Nazarbayev over the issue of Kulibayev’s lover in London. The source con­sid­ered that Kulibayev sim­ply did not have the time and admin­is­tra­tive reach to con­tin­ue his engage­ment with Telia at that level.

According to two for­mer Telia exec­u­tives, through­out the years Kulibayev, and lat­er Massimov, ensured — via bureau­crat­ic mech­a­nisms — that no major com­peti­tors arose for Telia. KCell, Telia’s local sub­sidiary, had enjoyed a mar­ket share of cir­ca 50% for a long time and the rev­enues were con­stant­ly on the rise. In 2013 KCell declared total rev­enue of $1.02 bil­lion. In return for this sup­port as agreed with Kulibayev, Telia have been pay­ing kickbacks.

The major­i­ty of kick­backs took the form of reg­u­lar pay­ments – masked as mar­ket­ing and ser­vic­ing con­tracts to com­pa­nies close to the Kazakh polit­i­cal estab­lish­ment as well as KCell man­age­ment. The big­ger kick­backs, which were direct­ed per­son­al­ly to Massimov and Kulibayev, were done via acquir­ing over­in­flat­ed assets. The prin­ci­pal Telia senior exec­u­tive coor­di­nat­ing the rela­tion­ship between Kulibayev, Massimov and the Board of Directors in Stockholm was Veysal Aral (“Aral”), KCell’s CEO and a for­mer Ericsson exec­u­tive, who sources under­stood to enjoy a cor­dial rela­tion­ship with Kulibayev. A Telia source said that, the way the rela­tion­ship func­tioned was that Aral first reached an agree­ment with the Kazakh politi­cians and then would con­vince Telia’s Board in Stockholm to approve the dif­fer­ent deals. Telia’s Board of Directors was aware of the way things were done by Aral in Kazakhstan and did not oppose to this as long as KCell’s rev­enues would con­tin­ue to increase.

From 1992 until 2007 Aral worked at Ericsson in Turkey, where he rose through the ranks to the role of Vice President. In 2007 he was named CEO of GSM Kazakhstan, lat­er renamed KCell. He retained his posi­tion at KCell until 2013, when the Board in Stockholm pro­mot­ed him to the role of Head of Business Area Eurasia. In 2014 he was dis­missed from this position.

Initial Contact with Massimov

According to the for­mer offi­cial in the Kazakh Agency of Information and Communications, since 2008 Massimov held a num­ber of meet­ings with Telia’s then CEO Lars Nyberg (“Nyberg”) and Tero Kivisaari, Head of TeliaSonera Eurasia. Preliminary intel­li­gence sug­gests that the ini­tial con­tact between Massimov and Telia has been facil­i­tat­ed by Kulibayev, who is also under­stood to be a ben­e­fi­cia­ry of Kazakhtelecom and who was already engaged in dif­fer­ent deals with Telia in South Asia.

The first doc­u­ment­ed instance in which Massimov had act­ed on behalf of Telia was in 2009, when he coor­di­nat­ed the nec­es­sary legal arrange­ments for GSM Kazakhstan to receive a 3G licence. Primarily, a source in the Kazakh gov­ern­ment advised that Massimov request­ed the rel­e­vant state agen­cies to make avail­able the 3G fre­quen­cy band which the com­pa­ny neces­si­tat­ed. In the sec­ond phase of this process, Massimov, in his capac­i­ty as the Prime Minister, order the exist­ing leg­is­la­tion on tele­coms licences to be amend­ed. Specifically, he has reduced the annu­al pay­ments required by hold­ers of 3G licences from KZT 2.8 bil­lion (approx­i­mate­ly $8.2 mil­lion) to KZT 500 mil­lion ($1.4 million).

In November 2010 these amend­ments were signed into law by President Nursultan Nazarbayev (“Nazarbayev”) and in November 2011 GSM Kazakhstan received the 3G licence. A source in the Presidential Administration stat­ed that with­out Massimov’s sup­port Telia could have not obtained the desired amend­ments in such a time­ly manner.


AR-Telecom and KT-Telecom

The first ques­tion­able trans­ac­tions of con­sid­er­able pro­por­tion in which Telia has been involved in Kazakhstan date back to 2007 and 2008, when the com­pa­ny acquired two dor­mant com­pa­nies for a total con­sid­er­a­tion of cir­ca