The Arch is located in the center of Kowloon like a giant, orange, lowercase n, and is one of the most impressive buildings in Hong Kong. In 2008, a penthouse unit was sold for $ 36.5 million to a company affiliated with Gulnara Karimova, the daughter of the late Uzbek dictator Islam Karimov. Three months later, the apartment was sold again, at a big discount, to another company. She was controlled by Ms. Karimova’s friend, Uzbek pop star Rustam Madumarov. These agreements, which came to light from criminal investigations in Uzbekistan, Switzerland and the United States, are just one example of how money flows from dubious sources into Chinese territory. These funds can be stored in some of the most expensive properties in the world or laundered through a network of companies that are easily established in both Hong Kong and other tax havens. Even persecution in many countries does not seem to have stopped the circulation of such wealth. In 2016, the company that owned the penthouse at The Arch – and was eventually controlled by Mr Madumarov – sold it for $ 68.4 million. This sale, discovered by The Globe and Mail during an examination of the cadastral documents, is reported for the first time. Kristian Lasslett, a criminologist and expert in Uzbekistan at the University of Ulster, described the transaction as “quite unbelievable”, saying it was an example of assets linked to “arguably the world’s highest-profile stealth case; ». At the time of the first sale, Mrs. Karimova was flying high. With a host of government titles, including Uzbekistan’s representative to the United Nations, he was building a business empire both at home and abroad. With the apparent arbitrariness of her father, she allegedly relied on companies to give her kickbacks and secure deals for her beloved for companies he controlled or paid off. This allowed for a glamorous jet-setting lifestyle for Ms. Karimova, even when most Uzbeks saw her as a “greedy, power-hungry man who uses her father to crush businessmen or anyone else standing in her way.” , according to a secret US government telegram published by Wikileaks. Other cables around this period noted that much of Ms. Karimova’s wealth was associated with Zeromax, a huge Uzbek heterogeneous group of companies registered in Switzerland, with interests in everything from oil and gas to textiles and Agriculture. Similar allegations were made in the media by Ms. Karimova’s ex-husband, Mansur Maqsudi, who in 2006 sued Zeromax in the United States, accusing the company of gaining control of companies seized by Uzbekistan after the relationship ended. with Ms. Karimova. In September 2008, according to documents from the Hong Kong Land Registry, the penthouse unit at The Arch was purchased by Zeromax and signed by a manager named Yokubov Ikromjon. Three months later, it was sold again to a company called the Rudolph Alliance, registered in the British Virgin Islands. Mr. Ikromjon represented Zeromax again, while its director, Shohrukh Sabirov, signed for Rudolph. Zeromax collapsed in 2010 in one of Switzerland’s largest bankruptcies, and prosecutors in that country and the United States soon began investigating the company, as well as two telecommunications companies linked to Ms Karimova, MTS and TeliaSonera. They would eventually claim to have received nearly $ 1 billion in bribes, which were laundered through accounts around the world and channeled into real estate in Hong Kong, London and Paris. In 2013, amid a growing international scandal, Mrs. Karimova fell dramatically in favor of her father. Several of her associates were arrested, including Mr Madumarov. The following year, he was arrested and later charged with leading an “organized crime group.” Uzbek prosecutors say the group controlled 45 business entities and 16 offshore companies, through which they acquired properties around the world, one of which was “a penthouse in The Arch skyscraper” in Hong Kong. Ms Karimova’s lawyer, based in Geneva, Grégoire Mangeat, said his client had denied any connection to Zeromax. She denied the allegations against her in her home country, “as the Uzbek authorities do not respect basic human and procedural rights.” Mr. Sabirov was named by Uzbek prosecutors as a member of Ms. Karimova’s “criminal group” and in 2020 was sentenced to 17 years in prison for corruption and other crimes. In his position as director of the Rudolph Alliance, Mr. Sabirov appears to have acted as proxy for Mr. Madumarov and his Hong Kong-based company, Expoline. Documents seen by The Globe show Mr Sabirov acting on behalf of both Mr Madumarov and Expoline in other transactions, and Swiss prosecutors described him as Mr Madumarov’s “secretary” in a court case. The fact that almost everyone associated with the company appears to have been in jail until 2016 did not prevent the Rudolph Alliance from disposing of Hong Kong property that year for a respectable 285 percent profit. The person who signed the sale on behalf of Rudolph is referred to as “Mr. Quan Wei, its sole director. “ Quan Wei’s name does not appear in any other documents related to this case. We were unable to contact him for comment and others involved in the agreement did not respond to requests from The Globe. Cadastral records show that one lawyer – Anthony Lam – participated in every penthouse agreement, first representing Zeromax in its market in 2008 and then acting on behalf of the Rudolph Alliance when it bought the property three months later and again when sold in 2016. Mr. Lam did not respond to multiple requests for comment. Tom Mayne, a Chatham House corruption and Central Asia policy expert who has been investigating Ms Karimova for years, said it was possible Rudolph’s ownership had been changed by Expoline and Mr Madumarov at the time of the sale. 2016. although it is unlikely that the lawyers themselves would represent the company if the new owners had no connection “with the Uzbeks. It would also be “a rather controversial move anyway, as you would actually change ownership of the property but would not declare it.” Under Hong Kong law, it is a statutory obligation for someone to report any suspicion that a property “in whole or in part, directly or indirectly represents the proceeds of any person from … an offense that may be charged.” There is no indication that the current owners of the penthouse apartment had or should have realized that the people from whom they were buying were alleged to be criminals. According to the Offshore Leaks database maintained by the International Consortium of Investigative Journalists, more than 30 apartments at The Arch are linked to companies in tax havens such as the Cayman Islands, Bermuda and the British Virgin Islands. In 2020, authorities in Uzbekistan outlined plans to seize Ms. Karimova’s assets worth nearly $ 2 billion worldwide. Thanks to the 2016 sale, the Hong Kong apartment will not be part of it and the money received by its owners seems to have disappeared into a network of offshore companies, they may never be recovered. The Morning and Afternoon Newsletters are compiled by Globe editors, giving you a brief overview of the day’s most important headlines. Register today.
