The ft has just posted an investigation into whom benefited from a multi-billion-dollar pipeline project involving russia, central asia and asia. documents the ft has seen indicate that a big beneficiary whoever interest has until now been secret ended up being timur kulibayev, billionaire son-in-law of an old kazakh president and something of the very most influential folks into the energy industry regarding the previous soviet union. under the scheme outlined into the documents, after mr kulibayev oversaw the prize of state agreements into russian pipeline team etk, it appears that etks owner alexander karmanov decided to an arrangement to divert the main companys earnings to mr kulibayev.

Mr kulibayevs attorneys sayno such scheme existed. they add he has-been the prey of a campaign of disinformation. the ft is publishing some of the papers that underpin our reporting. you can see all of them in a pdf here, both the originals and our translations. theyre primarily emails, and some presentations and extracts from agreements. weve made some redactions.

Here is a guide as to the the documents reveal (the numbers reference the order within the pdf). better to read the ft story very first.

The documents all result from the next half 2012. let us begin with an email (document 1) from etk to inna kim, whom worked at timur kulibayevs company mercury. this is actually the original (in russian):

The attachment (document 2) is named work arrange agp3, like in the third stage associated with the asia gasoline pipeline, a task co-owned by the kazakh and chinese states. it includes a diagram of how the apparentscheme would work. here is our converted variation:

What does this indicate?

It is a number of deals whereby the singapore device of etk (etk-sing) purchases metal from a chinese plant, sells it to a russian plant that means it is into pipes, purchases those pipes back and sells all of them to etks russian parent company (etk llc), which provides all of them toward asia gasoline pipeline project.

Whats important let me reveal that an organization labeled as fercom (simply someplace owner name, as with steel business) is marked as revenue centre.

By 24 hours later ms kim has additionally received a powerpoint presentation (document 3) to the woman mercury current email address. there are many more diagrams showing exactly the same framework that describe two more important aspects of the system. first (again within our translation), this powerpoint claims:

Its not using actual numbers, only arbitrary figures by means of an illustration. the overriding point is, the scheme appears designed to earn money with an enormous mark-up involving the cost of which the singapore business purchases metallic and also the price from which it offers it on to pipeline flowers.

As expected, contracts that etk and mercury folks exchange in e-mails show just these types of a mark-up doing his thing. heres element of a chinese one (document 4), showing the etk business in singapore purchasing metallic produced by jiangsu shagang in china:

And heres the purchase price:

Thats $935 a tonne.

Today then, heres an excerpt from exact same etk companys contract with tmk, a russian pipeline producer (document 5).

Its steel from exact same chinese plant:

But theres been an enormous mark-up:

Thats $1,500 a tonne a 60 per cent profit from the $935 price to buy the metallic in china.

The agreement provides an overall total worth:

Thanks to the mark-up, that $200m of steel (under this 1 agreement alone) translates to $75m in profit.

Profit for who, precisely?

If we get back to the powerpoint (document 3), we get an idea.

Ignore the $77 dividends figure: thats simply an illustration utilizing arbitrary figures. just what this shows is the fact that 70 percent for the revenue wouldultimately achieve individual x.

Which could this be?

Well, for one thing, the individuals who will be discussing this notion work for mercury. thats timur kulibayevs business. and although those included take time to avoid his name inside their e-mails, they suggest that mr kulibayev is individual x. in a single november 2012 mail, including, a consultant regarding plan informs an external agent that, if he wants to understand whom the beneficiary was to be, he should search the world-wide-web for businesses called kipros, mercury and almex.

Anybody after that recommendation and doing some googling in 2012 might have found a 2010 article in sunday occasions distinguishing kipros as timur kulibayevs organization. it absolutely was additionally a matter of public record that almex ended up being owned by mr kulibayev along with his partner, dinara kulibayeva, girl of kazakh dictator nursultan nazarbayev. as for mercury, thats the kulibayev business where those exchanging email messages about the pipeline system worked.

What about others side of the plan, the russian king contractor alexander karmanov? his etk team had been granted pipeline agreements while mr kulibayev ended up being offering as a premier kazakh authoritative overseeing the says commercial interests. theres a message (document 6) that shows mr karmanov ended up being yourself apprised of the finer points associated with the plan under which it appears etk profits had been becoming redirected to mr kulibayev. you do not require the russian translated to note that he had been copied in:

Vyacheslav lukashev of etk who sent that e-mail additionally corresponds at length with various kulibayev individuals. given that framework for the scheme evolves, the kulibayev folks suggest that a business they control when you look at the united arab emirates would be included. that organization is discussed in an email trade (document 7) between etks mr lukashev and mercurys inna kim. from our translation:

By mid-october 2012, mr karmanovs individuals and mr kulibayevs appear to have already been deep into the information on the system. etks vyacheslav lukashev and gaukhar kossakova, among mr kulibayevs folks, went back and forth. in one mail (document 8), ms kossakova inspections that etk is happy with the concept of making sure the scheme cannot be discarded without mr kulibayevs say-so giving his nominee a sort of fantastic share in etk. from our interpretation:

By the creators, she means the shareholders of etk, an exclusive business whoever equity was virtually entirely owned by mr karmanov. etks mr lukashev replies by explaining the logistics in making this take place. (2 months later, russian business records show murat balapanov, the nominee suggested by mr kulibayevs part, being issued a stake in etk and appointed business president.)

By the termination of november, every thing appears to be concurred. safkhan shahmammadli, a specialist employed by mr kulibayevs side, emails zhanel valiyeva at mr kulibayevs organization mercury final fees for the different consultants regarding the plan (document 9). this really is our interpretation:

Under the system as suggested within these papers, the solitary metal trade described above will have earned 70 per cent regarding the $75m revenue for individual x $53m for mr kulibayev, it seems, from a company that benefited handsomely from community contracts granted on his watch.