Kazakhstan’s first president, Nursultan Nazarbayev, controls billions of dollars of assets through a network of philanthropic foundations. It started about ten years ago. One of the first such funds was the Fund of the First President of the Republic of Kazakhstan – Elbasy. Initially, it was a public organization, but in 2011 it became “private”. After another 10 years, the fund was closed, joint investigation says OCCRP, Kloop и “Power”.
Other funds of the ex-president were the Nazarbayev Fund and the Nursultan Nazarbayev Fund, the Demeu Fund (translated as “support”) and the Elbasy Fund. The latter was created quite recently, last year.
The Demeu and Elbasy foundations do not conduct public activities, the authors of the investigation believe. However, other organizations are actively promoting educational, social and patriotic projects that are praised by the loyal Kazakh media.
For example, Nazarbayev University was founded in 2010 with the aim of modernizing Kazakhstan’s higher education system. The country also launched a network of secondary schools, which was called the Nazarbayev Intellectual Schools (NIS). These projects were financed by the Nazarbayev Fund, which does not even have a website. The fund does not publish financial statements or disclose how much money it receives from third-party sponsors or Nazarbayev himself.
Aslan Sarinzhipov, Chairman of the Board of the Fund, provided journalists with an official document, from which it follows that for 2019 the organization received $1 billion from sponsors and earned $200 million from investments.
During the previous 10 years, that is, until the resignation of Nazarbayev from the post of President of Kazakhstan, the Nazarbayev Fund did not make visible investments. Later, two funds owned by NIS and the Nazarbayev University created the Pioneer Capital Invest investment holding and through it bought the Kazakh bank ExpoCredit for $30 million. Then the Nazarbayev Fund took over 75% of Pioneer Capital. The original founders had only 25% of the company left.
Pioneer Capital began to actively invest in various enterprises, including the purchase of a major Kazakh creditor, Tsesnabank. This bank belonged to the family of Adilbek Dzhaksybekov, who previously headed the Presidential Administration.
After that, Pioneer Capital acquired several more banks, mobile operators, an online trading platform, warehouses, shopping centers and even a pasta factory.
To date, Pioneer Capital’s assets are valued at $7.8 billion, including US Treasury bills, government bonds of Kyrgyzstan and Kazakhstan, and $3.4 billion in cash. In 2020, the fund’s profit amounted to over $500 million.
The foundation’s charter states that its sole purpose is to sponsor an educational mission. However, the document also states that the first chairman of the main governing body, the Supreme Board of Trustees, is Nursultan Nazarbayev – it is he who controls the fund, including the very content of the charter.
In September 2021, Kazakhtelecom, a major mobile communications provider, announced that it had offered a 24% stake to “a wide range of investors in a public auction.” The same day, Bloomberg reported that a bank “linked to Kazakh leader” Nazarbayev had bought a 9% stake in the company. This bank belongs to the Nazarbayev Fund.
As it turned out, the rest of the shares were also bought by the Nazarbayev Fund, however, a less transparent structure was used for this – the Luxembourg company Pioneer Technologies. It belongs to another mysterious Luxembourg enterprise – Pioneer Horizon East. Journalists found out that the company is also connected with Nazarbayev.
According to some reports, KCell was once the most expensive mobile operator in the post-Soviet space, but the value of its shares fell by half in the months before Nazarbayev’s fund bought them. Representatives of minority shareholders of KCell asked the Kazakh financial regulator to check if this was market manipulation.
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