We are continuing the story about how a Japanese investor, the Marubeni Corporation, came into the Kazakh uranium industry and who benefited from the business-operation NAK Kazatomprom conducted in 2006-2007.
As you recall, in the first publication, we relate the story of how, on September 9, 2014, a NAK Kazatomprom representative unsuccessfully attempted to hand over the legal claim materials to former president of the company Mukhtar Dzhakishev who at the time was serving his term in prison.
In the second article, we examine the two transaction of the sale and purchase of the shares in the Kazatomprom-affiliated companies, namely the 47.5% share of Baien_U LLP and the 20% share of Kyzylkum LLP completed between Marubeni Corporation (as the buyer) and the offshore Swinton Investment and Finance S.A. company (as the seller).
In we third material, we show how offshore Energy Asia (BVI) Limited purchased 95% share in Baiken-U LLP and 40% share in Kyzylkum LLP from NAK Kazatomprom and present the agreements in question.
Now let us sum up the information we have related before in order to describe the 2006-2007 business-operation conducted by NAK Kazatoomprom and its top executive officer Mukhtar Dzhakishev more precisely and comprehensively.
Incidentally, we have no doubt that, while the latter played the role of the operation’s main orchestrator and executor, he was not the ordering customer since Mr. Dzhakishev, with all his personal and political weight, did not have enough influence to pull off such a scheme.
Apart from that, dozens of other people including members of the government and top-managers of the Samruk-Kazyna Sovereign Welfare Fund were involved in the scheme. And, since none of them dared to say anything against it, someone was providing a cover for the operation.
We have no doubt that it was (if not Nursultan Nazarbayev himself) then some of his close relatives or allies.
Here are the steps of the operations.
Forming a group of offshore companies consisting of:
а) the head office - Swinton Investment and Finance S.A., PO Box 146, Road Town, Tortola, British Virgin Islands,
б) Glendale International Investment LTD, PO Box 3175, Road Town, Tortola, British Virgin Islands controlled by the first through owning 94% of its shares;
c) Energy Asia Holding Ltd, P.O. Box 3175, Road Town, Tortola, British Virgin Islands controlled by the first through owing 100% of its shares;
d) Energy Asia (BVI) Limited, PO Box 3175, Road Town, Tortola, British Virgin Islands – the future buyer of the shares of the two Kazatomprom-affiliated companies; the firm belonging to Glendale International Investment LTD and Energy Asia Holding Ltd on an equal basis.
We have in our possession the documents that can help us trace the dates of the registration of both the companies and their nominal owners and top executive officers. However, in this particular case, we see no point in overloading the text with details that are of no interest to the general public.
On August 28, 2006, President of NAK Kazatomprom Mukhtar Dzhakishev and representative of Energy Asia (BVI) Limited L. Benjamin signed the agreements to sell/purchase 40% of Kyzylkum LLP shares for US$180 mln and 95% of Baiken-U LLP shares for US$360 mln.
With that, the sum of US$540 mln that the buyer agreed to pay for the shares of the two Kazatomprom-affiliated companies was to be deposited to the seller accounts no later than March 31, 2007.
On the twenty-something of December 2006 (we have not been able to establish the exact date because of the smudge in the photocopy), Swinton Investment and Finance S.A. signed with Marubeni Corporation the agreement to sell/purchase for US$540 mln 100% of shares of offshore Energy Asia Holding Ltd that, in its turn, owned 50% of the shares of Energy Asia (BVI) Limited.
With that, the seller, Swinton Investment and Finance S.A., was also the owner of 94% of the shares of Glendale International Investment LTD that, in its turn, owned 50% of the shares of Energy Asia (BVI) Limited.
The payment in the amount of US$540 mln was to be deposited to the seller account within ten working days since the fulfillment of the conditions stipulated in the agreement (incidentally, there were quite a few of them).
In the first quarter of 2007 (we cannot provide a more precise date), Marubeni Corporation deposited US$540 mln to the account specified by the seller, Swinton Investment and Finance S.A. Note that, upon the insistence of the latter, it was a one-tranche transaction. Most likely, the account belonged to Energy Asia (BVI) Limited, however, this has not yet been confirmed via related documentation.
Energy Asia (BVI) Limited transferred US$540 mln to NAK Kazatomprom for the shares it purchased from the national company (40% in Kyzylkum LLP and 95% in Baiken-U) for US$360 mln.
NAK Kazatomprom used the US$540 mln received from the sale of 40% of Kyzylkum LLP and 75% of Baiken-U LLP to purchase the shares of two Toshiba-affiliated companies that, together, owned 100% of US Westinghouse group through which the Kazatomprom management chaired by Mukhtar Dzhakishev intended to launch a nuclear assembly project at the Ulba metallurgical plant.
Now let us sum up the outcomes of the operation:
a) NAK Kazatomprom achieved a series success since it was able to attract such a big, well-known and reputable investor as Marubeni Corporation. And it invested the received funds in the amount of US$540 mln in its own investment project that, if successful, would have allowed the company to launch another one – very important, profitable and crucial both politically and technologically, namely nuclear assembly project under a license from Westinghouse group. In other words, a Western customer-oriented production;
b) NAK Kazatomprom and Mukhtar Dzhakishev personally grew very seriously in the eyes of society not just in Kazakhstan but abroad;
c) someone who was in control of Swinton Investment and Finance S.A. and Glendale International Investment LTD became involved in the large-scale and potentially very profitable investment project with participation of NAK Kazatomprom and Marubeni Corporation – practically for free, without investing any human or other resources in its preparation, execution and implementation;
d) someone who was in control of Swinton Investment and Finance S.A. and Glendale International Investment LTD instantaneously became the owner of the assets worth US$540 mln. For, at the time, Glendale International Investment LTD owned the identical 50% share in Energy Asia (BVI) Limited as did Marubeni Corporation that paid US$540 mln for it.
A curious arrangement, isn’t it?
To be continued