The London-Kazakhstan connection | Financial times

This is an audio transcription of the FT Newsletter podcast episode: The London-Kazakhstan connection

Marc Filippino
Good morning from the Financial Times. Today is Friday, January 14, and this is your FT News Briefing.

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Everyone says the office space is empty, but, you know, don’t tell Google. And it’s not a household name yet, but mighty market maker Citadel Securities may be listing in the public market. In addition, we will look at a London industry that masks corruption and abuse of power by elites in countries like Kazakhstan.

Tom Burgis
London, you know, is very slowly losing an empire and has acquired a set of services that it can sell to the new powers of the world.

Marc Filippino
I’m Marc Filippino, and here’s the news you need to start your day.

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Google buys billion dollar office space in London. This is in addition to a massive new headquarters it is building nearby. This is because millions of square meters of office space in the UK have been closed or used for other purposes. Google said it sees the office as a place for personal collaboration and connection. Part of the new investment will be used to repurpose existing office space.

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Our next story is also about London and its connection to Kazakhstan. The Central Asian country has just been rocked by massive political protests, and more than 160 people have been killed in the government’s crackdown.

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Those protests were fueled by frustration with the government, decades of post-Soviet autocracy and rising inequality. In short, the ruling elite in this resource-rich country controls most of the wealth, and much of that wealth resides in London. But the city is not just a place where Kazakh elites park their money. FT research correspondent Tom Burgis says London has become something of a headquarters for the global elite. He has written a book about it, and here he makes the connection between the recent protests and the British capital.

Tom Burgis
So one of the first places where the protest broke out recently was Zhanaozen, an oil town, I understand. And almost exactly 10 years ago, that was where Kazakhs discovered what happens to you when you cross a kleptocracy. And there were some protesters in the town square, protesting against corruption among other things, and the regime’s security forces opened fire on them and then tortured the survivors in the most grotesque ways. Coincidentally, the president, Nazarbayev, who has to give a speech at the University of Cambridge, knew that you have to wear a different face when you give a speech at the University of Cambridge, so he turned to someone whose consultancy was operating in Kazakhstan, and he was a brilliant communicator, Tony Blair.

Marc Filippino
. . . As in the former British Prime Minister. Tony Blair at the time ran a consultancy and collaborated with Central Asian regimes. So as Kazakh dictator Nursultan Nazarbayev prepares to go to Cambridge, Blair sent him a document.

Tom Burgis
In the document I’ve seen, he sends him his advice on how to turn around this carnage so that Nazarbayev looks like he’s standing up for stability in an unstable region. And Nazarbayev goes on and does that. He goes to Cambridge and delivers his speech, describing himself as this bastion of stability rather than one in charge of the murder and torture of his own people. And I think that’s a pretty striking example of how it sometimes has to be said with good intentions that these great Western figures can help legitimize and extend the rule of these kleptocrats.

Marc Filippino
And it’s not just PR advice. Tom says London is home to an entire industry of British people providing specialist services to what Tom calls global kleptocracy.

Tom Burgis
London, you know, is very slowly losing an empire and has acquired a set of services that it can sell to the new powers of the world. If you come to London, if you are a kleptocratic dictator, a corrupt dictatorship and you come to London, you and your allies, you have everything you could possibly need. You have lawyers to scare journalists. You have more lawyers to fend off any law enforcement interest in the origin of your immense wealth. You have a state agency that will help you put huge amounts of money into UK real estate; the Kazakh regime has put in about half a billion. You have the concierge services; people who will get your kids to the right schools and launder your family like you launder your fortune. And then you have the top-end PR firms that will serve you as well as any other propaganda operation has ever done. And then you have the private spies in Mayfair. You have everything you could possibly try to make illegitimate, corrupt rule look like it is the legitimate will of the, in this place, the Kazakh people, and to bolster your power back home by polishing your image and making political to create alliances abroad. and also the ability to attack your enemies with the help of these private spies and lawyers and the press and so on. So a full range of services available in an afternoon in London.

Marc Filippino
But Tom says the attitude is starting to change.

Tom Burgis
Mainly because there are more and more deaths in the UK, like the Litvinenko case, but also, you know, the attempted poisoning in Salisbury. More of a realization that this is not without a cost to these kleptocratic interests coming to the UK. And I think as there’s a growing awareness among MPs in particular of the sort of national security implications of entanglement with these sorts of regimes, there’s now a push for more regulation, better-funded law enforcement and more attention to the national security risks of this.

Marc Filippino
And one of the things that should happen is that all companies operating in the UK are now required to disclose the names of the people who own them.

Tom Burgis
In theory, any person with significant control over a UK registered company should be identified with Companies House, right? So there should be public records of that because the only thing this whole enterprise relies on is corporate cunning and secrecy and the ability of kleptocrats to hide their assets. Now the UK has some of the best legislation on this in theory, but it’s not being enforced. There’s all sorts of nonsense in Companies House and obviously false filings, thousands upon thousands undoubtedly. It’s the same with the white-collar crime institution, so for example, Serious Fraud Office has slashed its budget time and again through these years of budget cuts. It is constantly subject to political criticism, sometimes for mistakes it has made in its underfunded way. So the UK, I think, is aware of this issue, but not close to committing to addressing it.

Marc Filippino
That’s Tom Burgis. He is the research correspondent of the FT and the author of the book Kleptopia: how dirty money is conquering the world. By the way, Tom contacted Nazarbayev’s office for an answer. They did not respond to his request for comment.

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This week, US hedge fund billionaire Ken Griffin sold a stake in his company Citadel Securities to a few large venture capital firms. This is a really big deal and not just because of the money involved, $1.2 billion by the way, but it’s important because it’s Citadel Securities.

Katie Martin
It’s one of the key pieces of plumbing behind the US financial markets that most normal people have never heard of.

Marc Filippino
That is, of course, our markets editor Katie Martin.

Katie Martin
It treats like a huge part of stock transactions, of stock market transactions. It’s like, 27 percent of all deals executed in the market go through Citadel Securities in one way or another. And it’s an even bigger chunk in the retail market. So small brokers, I say small brokers, but brokers that target amateur investors like Robinhood and stuff, they effectively send their trades to Ken Griffin’s Citadel Securities to get the deals done.

Marc Filippino
So when Ken Griffin decided to sell a major stake in his company for the first time since Citadel Securities was founded 21 years ago, it got people thinking about one thing: IPO.

Katie Martin
This huge market maker could become a publicly traded stock in its own right, and that would be really fascinating because as I mentioned, Citadel Securities does a lot of the back-end trade executions for Robinhood. And I’m sure you remember Robinhood a year ago. . .

Marc Filippino
Oh yeah . . .

Katie Martin
. . . instrumental in this massive explosion of GameStop trading. The fact that Robinhood had to say at some point, okay, there are too many people buying this stock now, we need to turn it off and stop people from doing it, the conspiracy theories online, and they’re largely completely plucked from scratch but deeply believed, however, is that Ken Griffin had something to do with this in some way, and Citadel Securities played a major role in halting the trade. And there are many people in the amateur investment world who are still incredibly angry, rightly or wrongly, at Ken Griffin and Citadel Securities. So the idea of ​​it reaching the public markets itself, I think, would just be fascinating. I can not wait.

Marc Filippino
That’s Katie Martin, editor-in-chief of the FT.

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The Kremlin said yesterday that the US and NATO have failed to address their security complaints. The two sides met this week to try to defuse Moscow’s threat of military action in Ukraine. So what’s next for Russia and Europe? Join me on Twitter Spaces to talk about this, along with our top editors and correspondents covering the story. The talk will begin at 12:00 p.m. EST, 5:00 p.m. London. We’ve posted a link to the conversation in today’s show notes.

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You can read more about all of these stories on FT.com. This was your daily FT News Briefing. Be sure to check back next week for the latest business news.

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The FT News Briefing is produced by Fiona Symon and me, Marc Filippino. Our editor is Jess Smith. We had help this week from David da Silva, Peter Barber and Gavin Kallmann. Our executive producer is Topher Forhecz. Cheryl Brumley is the FT’s global head of audio, and our theme song is from Metaphor Music.

This transcript is generated automatically. In the unlikely event of an error, please send details for correction to: typo@ft.com. We will do our best to implement the change as soon as possible.

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