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Sherlock Holmes and the Mystery of the Kazakh Millions 

A new investigation by SourceMaterial solves a five-year riddle of secretive investments in London

With The Times.

It looks, at first glance, unassuming. A four-story, yellow-brick Georgian terrace with a shiny black door and gleaming brass knocker, opening directly onto chewing gum-stained pavement a stone’s throw from Regent’s Park. Narrow your eyes, though, and looking up at the first-floor window you might persuade yourself of having caught a glimpse of the unmistakable deerstalker-hatted silhouette, wreathed in smoke, chewing over a “two-pipe problem”.

The true ownership of Sherlock Holmes’ fictional London home at 221b Baker Street has for years been the centre of a very real mystery.

A new SourceMaterial investigation, published with The Times, has solved the puzzle—and raises new questions about the role of luxury London property as a haven for secretive wealth.

Leaked documents obtained by SourceMaterial show the Baker Street house and adjoining buildings worth £140 million were owned by Dariga Nazarbayeva, the daughter of Nursultan Nazarbayev, who ruled Kazakhstan for 29 years from 1990, still holds the title of “leader of the nation” and chairs the national security council.

Speculation about the property dates back to 2015, when the campaign group Global Witness traced links to associates of Nazarbayeva’s ex-husband, Rakhat Aliyev, who made a fortune from Kazakhstan’s sugar industry before a spectacular falling-out with his father-in-law, the president.

But Aliyev died in 2015 in prison in Austria, awaiting trial for murder and under investigation for money laundering, and the mystery remained—until now.

The leaked files show that not only was the Baker Street building owned by Nazarbayeva and her son Nurali Aliyev, a multi-millionaire businessman in his own right and widely tipped as a future Kazakh president, but they also went to great lengths to keep their ownership secret.

Earlier this year, Nazarbayeva, a trained opera singer with a business empire worth some $600 million and until recently speaker of Kazakhstan’s senate, was embroiled in a landmark anti-corruption lawsuit relating to a different set of premium London properties.

The National Crime Agency suspected that the real estate was being used to launder Aliyev’s dirty money and deployed new ‘McMafia’ powers to take one of the family’s advisers to court to explain how they were paid for.

That lawsuit failed when the judge ruled that the properties were not bought with Aliyev’s money—but not before Nazarbayeva was for the first time compelled to give a public account of the origins of her wealth, offering a rare glimpse into the finances of one of the world’s most powerful, and intensely private, families.

The case revealed that, just as with Baker Street, it was not Aliyev but Nazarbayeva and her son who acquired the string of high-end properties: a mansion on ‘Billionaire’s Row’ in Highgate, another nearby, and a double apartment in Chelsea with a combined value of more than £80 million.

Now SourceMaterial’s investigation raises fresh concerns about the case, and about Nazarbayeva’s testimony on how she made her millions.

When contacted by SourceMaterial, lawyers for Nazarbayeva said any allegation that she misled the court was “categorically false”. They declined to answer questions about Baker Street.

‘Professional enablers’

‘McMafia orders’, named after the television series that follows fictional oligarchs as they launder drug money in London and officially called Unexplained Wealth Orders, were initially hailed by transparency activists as a valuable tool in the fight against corruption. But doubts have crept in.

“The purpose of the legislation was that it was supposed to stop dirty money coming into Britain,” said Margaret Hodge MP, who chairs a cross-party anti-corruption group in parliament. “It seems that actually the legislation is less effective than we thought.”

By their nature McMafia orders target the world’s wealthiest—the very people who can draw on almost endless resources to make them go away.

“Whilst the orders appear to provide the NCA with more clout and greater powers, the reality is that it is highly probable that the oligarchy will have the financial means to ensure their lawyers—a key group of professional enablers—find ways to circumvent this legislation,” said a July 2020 parliamentary report into Russian influence in the UK.

Nazarbayeva is no exception when it comes to hiring very expensive lawyers and was represented in court by the elite law firm Mischcon de Reya.

Susan Hawley, head of the campaign group Spotlight on Corruption, said the UK should act urgently to amend the legislation.

"Unexplained wealth orders were intended to fill a real gap where law enforcement were struggling to rapidly freeze corrupt assets,” she said. “The government has consistently cited them as being at the heart of its strategy to tackle dirty money, so it is extremely important whether they are workable or not.”

Sugar time

When Rakhat Aliyev, the son of a distinguished surgeon who followed his father into the profession, married Nazarbayeva in 1983, his new father-in-law was already a powerful man. Soon after, Nursultan Nazarbayev became prime minister of Kazakhstan, then still part of the Soviet Union, and shortly before independence in 1991, president.

Aliyev rose with him, becoming in turn deputy minister of foreign affairs, chief of the tax police, and then deputy chief of the KNB, the feared Kazakh offshoot of the KGB. But it was in business that he best brought his connections to bear, monopolising the country’s sugar industry to the extent that he was known as “Sugar” by friends and enemies alike.

Working alongside her husband, Nazarbayeva amassed an empire of her own stretching beyond sugar to television, car trading, banking and real estate.

“Dariga Nazarbayeva is a successful and accomplished businesswoman,” who made $600 million in her own right, Mishcon de Reya later argued in court—though being the president’s daughter may have helped.

Then Aliyev made a catastrophic mistake. When Nazarbayev signalled plans to amend the constitution and rule for life, he objected, announcing his intention to run for the presidency himself.

The response was swift. On 28 May 2007 Aliyev was stripped of his government positions. His citizenship was annulled and his wife divorced him—against his will and by forging his signature, he would later claim.

Next the Kazakh police issued an international warrant for his arrest in connection with the killing of two executives at Nurbank, which he had previously controlled. (Whether or not he was involved is uncertain—he would be dead before the case came to trial.)

Finally, a Kazakh court convicted him in absentia of kidnap, forgery, seizure of power through violence, heading an organised crime group, revealing state secrets, embezzlement, arms trafficking and abuse of power. All of his businesses in Kazakhstan were confiscated. He was sentenced to 40 years in prison.

Highgate mansion

On the same day that Aliyev was publicly disgraced, 28 May 2007, an obscure company called Gas Development LLC was created in Kazakhstan.

Its significance would not become apparent until 12 years later when, during the NCA’s unsuccessful ‘McMafia’ lawsuit against her adviser, Nazarbayeva was asked by the High Court to explain how she paid for her £9.3 million Highgate mansion.

Nazarbayeva told the court that she funded the purchase by selling shares in JSC Kant, a sugar company once owned by Aliyev. The buyer, she explained, was Gas Development.

What the court was not told was that Nazarbayeva seems to have controlled Gas Development herself. That would mean Nazarbayeva was simply moving money from one of her assets to another in imitation of a genuine sale—and that details of the transaction would shed no light on the real origin of the funds.

Kazakh records show that when it paid Nazarbayeva £38 million for the Kant shares in January 2008, Gas Development was listed as being owned by a Kazakh company called Kompaniya Ardelis.

But further searches reveal that Kompaniya Ardelis could not have been the real owner, as it did not exist until more than two months after the sale. What did exist, however, was a trail of evidence leading back to Nazarbayeva.

Four days before Gas Development was incorporated in Kazakhstan, a company called Ardelis Management was set up in the UK. This was then transferred to a shell company in the British Virgin Islands controlled by Nazarbayeva and later by her son Nurali, according to data from the Panama Papers leaked to the Sueddeutsche Zeitung and shared with SourceMaterial by the International Consortium of Investigative Journalists.

As well as being deeply entwined with Gas Development, Ardelis Management was set up on the same day (and by the same people) as another company, Beatrice Alliance, which was owned by Nazarbayava and also bought Kant shares from her.

Ardelis Management also shared a director with Gas Development, while all of Ardelis’s other directors had links to the company, as well as to Galimzhan Yessenov, a 38-year-old Kazakh oligarch who is close to the Nazarbayevs.

Both Ardelis Management and Beatrice Alliance, the UK limited companies secretly used by Nazarbayeva to own Kazakh sugar assets, left no trace of the share transactions in their accounts filed at Companies House, instead saying the businesses were dormant. This is normally illegal.

Contacted by SourceMaterial, Nazarbayeva’s lawyers denied that the Gas Development sale was designed to create a veneer of legitimacy to move money out of Kazakhstan.

“Our client was candid about the source of funds,” Mischon de Reya wrote to SourceMaterial on 2 October 2020. “Any suggestion that our client misled the Court in the recent UWO proceedings is entirely untrue.” They declined to answer questions about the use of dormant companies.

Mystery on Baker Street

Nazarbayeva and her advisers went to great lengths to keep her investments secret, confidential documents obtained by SourceMaterial show.

Like Nazarbayeva’s other investments, the building on Baker Street is mired in complexity, with a convoluted ownership structure that shifted repeatedly over the years. Global Witness had linked it to associates of Aliyev in 2015. But the trail went cold when it reached secrecy havens in the Caribbean.

At that time the property was owned by a UK company, itself owned jointly by two more UK companies, both owned by a fourth. This was in turn owned by a company in the British Virgin Islands and ultimately an anonymous foundation in Panama.

Only with the aid of new leaks to SourceMaterial was it possible to establish that the real owner was Nazarbayeva: she controlled Farmont Investors Corporation, the British Virgin Islands shell company that owned the UK business to which the building was registered.

In court, when the McMafia order forced her to explain how she paid for her other London properties, the judge accepted the argument that this sort of convoluted structure is normal practice and not intended to conceal ownership.

But leaked emails between her lawyers and financial advisers stress the confidentiality of Farmont’s true ownership and the importance of keeping the information out of the hands of journalists.

In October 2015, ultimate ownership structure shifted yet again. Ultimate control of Baker Street passed to Landmark Network Real Estate Ltd, newly established in Abu Dhabi.

From the documents it looks at first glance as if Nazarbayeva, perhaps spooked by the Global Witness report, had disposed of the property. But SourceMaterial’s reporting suggests that she retains ties to Baker Street.

Five-way split

A few weeks before ownership switched to Abu Dhabi, a British lawyer, Andrew Baker, was appointed to oversee one of the British Virgin Islands companies in the property’s ownership chain. At the same time, he was appointed to the foundations that controlled Nazarbayeva and her son’s other London properties: it was Baker who would ultimately be targeted by the NCA’s McMafia order.

There is more evidence to suggest Nazarbayeva’s continuing ties to Baker Street.

Landmark in Abu Dhabi has five shareholders, each holding 20 per cent. One is Mohamed Saeed Mohamed Al Ariqi, an executive at Al Hilal Bank and a director of its branch in Kazakhstan, filings show.

Just a few months before Landmark was created, Al Ariqi registered another business, SpaceEdge International Real Estate, at the same address. His business partner was Massimiliano Dall’Osso, a longstanding Nazarbayeva confidant who helped run several of her companies and properties and until recently was a director of Farmont Baker St, the UK company that is the first link in the ownership chain.

Al Ariqi did not return an emailed request for comment from SourceMaterial. A person who answered a call to Landmark’s offices said she “was not authorised” to discuss the company. There is no suggestion that Landmark’s shareholders acted illegally.

“What’s clear is that this is one of the most complex webs of shell companies that I have seen and it’s been established for what looks to be the sole purpose of disguising the ultimate beneficial ownership of properties,” said Margaret Hodge MP.

One benefit of splitting the ownership of Landmark (and ultimately, of the Baker Street building) five ways may have been to get around new laws designed to prevent money laundering. In early 2016, the UK government brought in long-trailed plans requiring British companies to publish details of anyone owning more than 25 per cent of them.

Keeping each shareholding below this limit ensured that the Baker Street building’s owners, and their links to Nazarbayeva, remained secret—and perhaps explains why it never featured in the 2019 McMafia order.

Responding to SourceMaterial via her lawyers, Mischon de Reya, Nazarbayeva declined to answer detailed questions about her ownership of the Baker Street property.

Fake protests, real deaths

One reason for the secrecy surrounding Nazarbayeva’s assets may be the circumstances in which they were acquired.

While Nazarbayeva gained much of her riches from Aliyev during their divorce, a series of court cases and tribunals have suggested that a significant portion of her wealth was expropriated from her former husband’s allies.

When Aliyev broke with his father-in-law, the president, the feud quickly engulfed those around him, including his Lebanese brother-in-law and business partner, Issam Hourani.

Aliyev had already been charged with the killings of the two bankers. Now he and Hourani were accused of another murder—of Anastasiya Novikova, the wife of Aliyev’s cousin, found dead beneath Hourani’s ninth-floor Beirut apartment in 2004.

The death was ruled a suicide. But after Aliyev’s breach with Nazarbayev, two new witnesses came forward with evidence that he and Hourani had arranged the killing. Only later did it emerge that both had ties to the KNB security service, making their testimony “self-evidently unreliable”, according to a judge in the UK.

In March 2017, Hourani and his younger brother Devincci won damages from Psybersolutions, a US consultancy that arranged rent-a-crowd protests outside their Belgravia home, libellously accusing them of killing Novikova. Exactly who paid Psybersolutions was unclear.

Like Aliyev, the Houranis and their associates were stripped of Kazakh businesses worth tens of millions of dollars. Officially, the assets were confiscated by the state, the Houranis said. In reality, some ended up as the personal property of Nazarbayeva.

‘No way out’

Trouble began on 27 June 2007, just a month after Aliyev’s citizenship was terminated, when armed KNB agents raided the Hourani family's offices at 92A Pdezhaera Street in Almaty.

“It seemed calculated to frighten us and it succeeded,” Devincci Hourani told a 2010 arbitration tribunal. His brother Issam’s Kazakh nationality was annulled over a missing HIV-negative certificate.

In the following weeks, “pressure from various authorities mounted” under the direction of Nazarbayeva, the Houranis told a US court. At a meeting in July, she “offered to use her influence with the government to try to ‘protect’ his family's businesses from further harassment if he would sign over his family's shares in the mass media companies in which they held interests,” Devincci said.

But later she told them that “[nothing] could be done to save anyone”, that “her father would not listen anymore to her” and that “there was no way out”, before ordering them to hand over their investments, the Houranis claimed.

“Under duress”, Devincci signed the paperwork to turn over his family’s shares in two media companies “to Dariga for her use”, he testified.

While some of the Houranis’ claims failed on jurisdictional grounds, in 2017 a tribunal of the International Centre for Settlement of Investment Disputes ruled that the expropriation of their oil licences was unlawful, ordering Kazakhstan to pay them $39.2 million.

The tribunal “does not doubt that the claimants and their relatives have indeed been the subjects of harassment,” the arbitrators said.

That campaign also extended to the Houranis’ brother-in-law, Kaseem Omar, a shareholder and backer of their Kazakh oil company, whose drilling licences were suspended.

Omar owned Ruby Roz, an industrial chicken farming company also based at 92A Pdezhaera Street. After a former employee of the company was brought forward to testify that Issam Hourani had assaulted him some years previously, he signed the business over to Nazarbayeva.

“When she returned the companies to him, there was nothing left but corporate shells,” the Houranis said in US testimony.

Omar’s regional airline was confiscated when authorities ruled his original purchase unlawful, while corporate filings and a leaked contract posted online by Kazakh activists show his oilfield supply business was sold to Nazarbayeva for just $8,000.

Also among the assets Omar surrendered to Nazarbayeva was a 24 per cent stake in JSC Kant, the sugar company whose shares she sold to pay for her Highgate mansion.

In correspondence with SourceMaterial, Nazarbayeva and her lawyers declined to answer questions about the alleged expropriations—though they did explain her enormous fortune in court:

Nazarbayeva is an “independently successful businesswoman with legitimately obtained independent wealth”, they said.

Picture by Blandine Le Cain

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