Glencore, the world’s largest commodities trader, passed down a huge portion of its share in a Kazakh private school to a trusted lieutenant of the country’s ex-dictator, Bulat Utemuratov. This secretive deal was hidden from investors and is thought to have been a “Gift” to sweeten the relationship with the influential Utemuratov.
Glencore’s history in frontier markets
The Glencore empire, worth over £42 Billion has made a reputation for dealing with places others would never step a foot on, including the Democratic Republic of Congo, Colombia and even Western Sahara. Gaining access to these frontier markets involves dealings with these influential natives.
Glencore’s past record of scandals included reports that the company funnelled cash to Dan Gertler, a diamond tycoon and close confidant of Joseph Kabila, former President of the Democratic Republic of the Congo.
An influential Glencore employee was quoted in 2012 stated to a reporter that “Glencore has a Gertler everywhere. Relationships with influential, politically connected figures. People who can arrange deals at the elite level. “
Who is Bulat Utemuratov?
Bulat Utemuratov was once “Manager of the President Affairs” to Nursultan Nazarbayev a dictator that ruled Kazakhstan from its independence in 1991 until the 19th of March 2019 when President Nazarbayev resigned.
As the company’s closest friend, he’s been doing rather well for himself. After heavily benefiting from Glencore’s 2011 IPO, he spent $600 million on the Moscow’s Ritz-Carlton hotel, known for allegations in an intelligence dossier about Donald Trump in 2016.
Glencore’s Sudden Interest in Education
Glencore is not famous for investing in private education, so what was its intentions by investing in a prestigious private school? Through its local subsidiary group, Kazzinc, the company handed over $23 million to fund the building of the Haileybury Astana school, the second satellite school of the Herefordshire private school.
Haileybury Astana is a modern school right along the bank of Ishim river, has an indoor swimming pool, two sports halls, dance and performing art studios was opened by President Nazarbayev in 2011. Kazakhstan is becoming a wealthy nation and aims to become one of the top 30 most developed by 2050 and this school is certainly a statement of intent.
The undisclosed investment was revealed by Russian-language Kazakh corporate fillings examined by Source Material and The Times.
They found that the company quickly wrote-off its Haileybury investment, which later turned out to be given to Utemuratov with no Glencore shareholder being informed.
Glencore claims that they have been supporting Kazakhstan’s development over the past 20 years, including the strategical investment in Astana the modern capital.
Glencore’s other dealings with Utemuratov
Haileybury Astana is not the only investment between Utemuratov and Glencore. They have been involved in a number of suspicious deals over the years.
Kazzinc invested $13 million in a luxury real estate development by Utemuratov’s Verny Capital – Talen towers, a complex including 30-floor skyscraper, Astana Ritz-Carlton and a shopping mall, all down the street from Nazarbayev’s presidential palace.
Utemuratov received a set of transactions from Glencore that gave him millions of dollars, as well as gold mines that generated tens of millions in cash.
They were also involved in a multimillion-dollar deal to purchase a gold mine in the country. Although closer to their normal dealings, are Glencore exploiting Utemuratov’s influence to gain more access in the country?