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The New Oligarch: How Galimzhan Yessenov Built $500m Fortune

It is nearly 30 years since the collapse of the Soviet Union and many of the oligarchs who got rich in that turbulent era are now retiring to their superyachts and villas.

As the old guard retreat, a new generation of oligarchs is emerging in Central Asia - some are taking over family business empires while others are using their political connections to accumulate vast wealth.

Take, for example, Galimzhan Yessenov, a 38-year old businessman from Kazakhstan who has accumulated a fortune of more than $500 million, according to Forbes.

Yessenov does not appear to be in the mould of Mark Zuckerburg or Jeff Bezos – entrepreneurs who made their fortunes inventing or building successful businesses. Instead, Yessenov has acquired companies worth hundreds of millions of dollars with no obvious explanation for how he came by the resources to do so.

In 2013, when Yessenov was just 31, he bought ATF Bank for $500 million from the Italian lender UniCredit. Yessenov owns 99.7% of ATF, Kazakhstan's fifth-largest bank, via a company called KNG Finance but it has never been disclosed where he obtained the money to make this purchase.

A Political Marriage

The young businessman does not appear to have inherited his wealth or to be using family money. Yessenov was brought up by his single-parent mother and takes his name from her side of the family. His maternal grandfather was Shakhmardan Yessenov, a scientist and minister of geology in Kazakhstan during Soviet times.

Yessenov therefore comes from a prominent but not particularly wealthy family in Kazakhstan. Yessenov's meteoric ascent onto the Forbes rich list instead appears to be related to his marriage in 2007 to Ayzhan Akhmetzhankyzy Yessim.

The couple were reportedly married in Dubai to avoid scrutiny in Kazakhstan as Ayzhan's father is one of the country's most powerful political figures: Akhmetzhan Smagulovich Yessimov. The 69-year old Yessimov is the former mayor of Almaty and a close political ally of former president Nursultan Nazarbayev. He is currently the chairman of Samruk Kazyna, Kazakhstan's $60 billion sovereign wealth fund.

Kazphosphate

Almost immediately after marrying Yessimov's daughter, Galimzhan Yessenov started to accumulate valuable assets.

In October 2007, a UK company called Kazphosphate Limited acquired the assets of a fertilizer producer called Kazfosfat in Kazakhstan. The price paid was $120 million, according to filings at UK Companies House. The company, which employs more than 6,000 people in Kazakhstan, had total assets valued at $437 million last year.

Corporate documents showed that Kazphosphate was owned by two entities located in the British Virgin Island (BVI): Beronia Enterprises and Balliana Capital. The UK introduced rules requiring companies to disclose ultimate beneficial owners in 2016 and it was subsequently confirmed that Galimzhan Yessenov is the owner of Kazphosphate via the BVI entities.

The money to acquire Kazphosphate came in the form of unsecured loans worth $141 million from two other BVI entities called Kennon Finance and Drewes Management. The corporate nominee for all of the BVI entities (Beronia, Balliana, Kennon and Drewes) was a Lichtenstein-based trust firm called Audina Group.

It seems unlikely that an established bank or lender would provide unsecured loans of $141 million to a 25-year old with no track record. And it is also unusual that the nominee representative of both the lender and the purchaser was the same.

It appears that the Kazphosphate deal was financed by a related party – and this is confirmed by the UK corporate accounts which list Kennon and Drewes as related parties. Could it be, therefore, that Yessimov bankrolled his new son-in-law Yessenov in the acquisition of Kazphosphate? And if so, where did the career politician Yessimov get the money to do this deal? And why the secrecy in using so many offshore companies?

Another mystery stemming from this transaction was what happened to a loan of $47 million from Kazphosphate to another BVI company called Bloomtrade International. This unsecured loan has since had about half its value written down, according to the UK company accounts.

Bloomtrade has since been liquidated in the BVI and has rematerialized in the Marshall Islands. Will Kazphosphate get its money back or were these loans actually payments to Yessenov and his backers? MacIntyre Hudson, Kazphosphate's UK accountants, are not convinced the money will be repaid and have provided only "qualified" approval of the company's financial statements as a result.

Family Deals

Yessenov's business empire extends to various other sectors and his good fortune can often be traced back to 2007 – the year he married into the Yessimov clan. He became a large shareholder in Delta Bank around this time and was the chairman of the board between 2007 and 2011, when he transferred his stake to his mother Shagizat Yessenova.

Yessenov and his mother also co-own Otan Finance, which owns coal assets in Kazakhstan, a tourist agency called Naz and a bakery. His mother and brother co-own a luxury mansion at Cap Ferrat on the Cote d'Azur in France. Cap Ferrat is known as an enclave for oligarchs and their family property at 7 Avenue Jean Cocteau was acquired for €10 million in 2011, according to local property records.

As well as the physical trappings of wealth, Yessenov has also accumulated various honorary titles as his social position has improved. He is the president of the Kazakh Chess Federation, vice president of the Triathlon Federation and president of the mixed-martial arts federation.

Within a few years, Galimzhan Yessenov has accumulated enormous wealth and privileges. He is part of a new generation of oligarchs emerging in Central Asia but it appears that his ascent has more to do with old-fashioned political connections rather than the "entrepreneurial spirit" demonstrated by many of the post-Soviet oligarchs.

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