In Kazakhstan, ranked 122nd (of 180) on Transparency International’s Corruption Perception Index, the family of President Nazarbayev and his oligarchs use natural resources to amass huge wealth. In this environment – in which the line between the public and private sectors is blurred – Vitol forged a path to the top. From 2015 to 2018, the Geneva-based trader pulled off a masterstroke by lending US$5.2 billion to KazMunayGas, the national oil company, in exchange for cargos of crude oil.

A Public Eye investigation reveals the key role played by a discreet joint venture in Vitol’s formidable rise in Kazakhstan. Registered in Rotterdam in 2003, Ingma Holding BV handled oil contracts worth at least US$93 billion from 2009 to 2016. The company paid out over a billion dollars in dividends to its shareholders, distributed between Vitol and its partners. Among them are ‘politically exposed persons’ (PEPs) – first Arvind Tiku, an Indian business man and Ingma shareholder via his company Oilex NV; then from 2010, the Kazakh oligarch Dias Suleimenov and probably Daniyar Abulgazin, both former high-level oil sector officials. The trio always maintained close links to Timur Kulibayev, the president’s son-in-law. From 1997 to 2011, the latter headed several of the country’s energy companies.

Kulibayev has never owned shares in Ingma Holding BV, but documents exclusively accessed by Public Eye show that he indirectly benefitted from the company. In 2010, Switzerland opened legal proceedings against the president’s son-in-law and Arvind Tiku for money laundering. Abandoned in 2013, the case nevertheless revealed that the two men were joint-beneficiaries of a trust held at Credit Suisse. From May to August 2006, the trust received US$600 million from companies that did not belong to Kulibayev. Among them was Oilex NV, joint owner of Ingma with Vitol, which paid in over US$100 million. In 2007, US$283 million was withdrawn from the trust in the form of zero-interest loans awarded to Merix International Ventures, which belongs to Kulibayev. Ultimately, Arvind Tiku had granted him a US$101.8 million loan through Oilex NV.

According to Vitol, Timur Kulibayev is not a direct or indirect beneficiary of Ingma. The trader states that it complies fully with all relevant anti-bribery legislation. Confronted with the existence of the trust and loans, Vitol says it does not own shares in either Oilex or the trust and is therefore unable to comment on purported payments made between the two entities.

The affair shines a spotlight on one of the strategies used by traders to gain market share: associate oneself with PEPs in a joint venture. This strategy entails high risks of corruption. In contrast to banks which are obliged to vet their PEP clients under Swiss anti-money laundering legislation, traders are not subject to any such requirements. The Swiss Federal Council must act and impose due diligence requirements on traders, in particular in relation to their business partners. The case further highlights the importance of obliging traders to disclose payments made to producer countries for the purchase of commodities, to limit the risks of embezzlement. During the Swiss Council of States’ winter parliamentary session, it will have the chance to correct the Federal Council’s inaction by subjecting traders’ activities to the transparency provisions debated in the context of the review of Switzerland’s company law.

Click here for more information or contact:

Oliver Classen, Media Director, +41 44 277 79 06, oliver.classen@publiceye.ch

Agathe Duparc, Senior Researcher, +41 21 620 03 09, agathe.duparc@publiceye.ch

This version is a translation of the original document which was written in French. It is made available for reference purposes only. In case of discrepancy between the versions, the original will prevail. Public Eye will not be held liable for any damage on account of errors, inaccuracies or misunderstandings stemming from this translation.