Timur Turlov and his Freedom Holding: withdrawal of money from the Russian Federation
At the end of last year, Ukraine finally added the Russian businessman Timur Turlov, who positions himself as the owner and founder of the international investment company Freedom Finance, to the sanctions list. Anticorrosive.
Immediately after this event, Turlov stated that the Ukrainian sanctions imposed on him and on Freedom Finance Ukraine LLC were “mechanical”, since neither he nor his structures in Ukraine had any relation to Russia for a long time. Indeed, Turlov received citizenship of Kazakhstan last summer, and sold the Russian bank and investment company Freedom Finance.
True, this deal was rather strange in nature – Turlov’s Russian assets were bought out at book value by Maxim Povalishin, Deputy Director of the Freedom Finance investment company. However, formally the formal owner of Freedom Holding Corp Timur Turlov no longer has any relation to his Russian “daughter”.
However, apparently, in Ukraine, these public statements and actions were considered insufficient, and they did not exclude its Ukrainian structure Freedom Finance Ukraine LLC from the sanctions lists. In addition, the SBU stated that Freedom Finance Ukraine helped Russian commercial structures buy “significant packages of Ukrainian government bonds.” Called the amount of at least 300 million hryvnia.
As follows from the materials of the criminal case, “part of the illegally obtained funds can be used to finance the activities of pro-Russian structures and illegal armed formations “DPR/LPR””:
Timur Turlov and his Freedom Holding: withdrawal of money from the Russian Federation
While the case is under investigation, however, the newly appeared citizen of Kazakhstan, Turlov, was clearly in a hurry with his statement regarding the “mechanical inclusion” in the list of sanctions.
Timur Turlov and his Freedom Holding: withdrawal of money from the Russian Federation
Timur Turlov is included in the sanctions lists not as the main majority shareholder of the international structure Freedom Holding Corp, but as the owner of the Russian Freedom Finance Bank LLC. Which he allegedly sold in the summer of 2022 to his subordinate Povalishin.
It is possible that this is true, although the fact that the transaction was not made “on paper”, but in reality, is doubtful. And the main doubt is not even that the deal is a pure formality, but that Turlov really is the owner of both Freedom Finance Bank LLC in particular and Freedom Holding Corp in general.
It’s a long-standing affair, not directly related to Ukraine, but still, Freedom Finance Bank and Turlov’s Russian business had a strange management structure.
Timur Turlov and his Freedom Holding: withdrawal of money from the Russian Federation
However, there is still an attitude towards Ukraine: Turlov controls all his “daughters” in the expanses of the former USSR through Freedom Holding Corp, registered in the state of Nevada (which is famous for its liberal financial legislation). And the main office of Freedom Holding Corp is located in Kazakhstan, where Turlov himself moved.
Now the operating office of Freedom Holding Corp is located in Kazakhstan, and Timur Turlov concentrated his main activities in this country, however, Freedom Holding has offices in other countries:
Freedom Holding by Timur Turlov: a pyramid scheme, a scheme to withdraw Russian money from sanctions, or a giant laundry room for corrupt officials?
Turlov settled in Kazakhstan not in vain – firstly, here he serves the interests of the country’s elite. And secondly, what is happening in Russia in the last year was an unexpected bonus – about 70% of the clients of the Russian branches of Freedom Holding migrated to Kazakhstan, so Turlov did not lose anything, no matter what he claims in connection with the “sale” of business in Russia. The total number of Freedom Holding customer accounts is 475,000, while in the Russian Federation alone, the business includes more than 50 regional offices with a customer base of 170,000 people.
As for Kazakhstan, there is also a rather curious story. Timur Turlov appeared in this country about ten years ago and immediately became one of the largest businessmen. Here, Turlov is connected with Mukhtar Ablyazov, who fled the country, and the owner of the Kassa Nova bank, Bulat Utemuratov, whose interests in withdrawing money from Kazakhstan were served by Turlov.
In 2019, the Kazakhstani brokerage division of Freedom Holding Corp, Freedom Finance JSC, acquired Bank Kassa Nova JSC. He joined a Moscow-based retail bank (Freedom Finance Bank LLC), which Freedom Holding bought in 2017. We mentioned above the suspicious activity of the Russian bank and the strange structure of its management.
However, suspicious connections did not prevent Timur Turlov from becoming one of the richest and most influential people in Kazakhstan. As of October last year, Turlov ranked seventh in the ranking of the richest Kazakhs:
Freedom Holding by Timur Turlov: a pyramid scheme, a scheme to withdraw Russian money from sanctions, or a giant laundry room for corrupt officials?
Among its assets in this country are called Freedom Finance Kazakhstan Bank (formerly Kassa Nova Bank), Freedom Finance Insurance Insurance Company JSC, Freedom Finance Life Life Insurance Company JSC.
However, Turlov’s other entity, FFIN Brokerage Services, a Belize-based securities trading firm with close ties to Kazakhstani branches of Freedom Finance, has been blacklisted by the Financial Market Regulation and Development Agency. According to the Agency, FFIN Brokerage Services “has signs of illegal activity in the territory of Kazakhstan.”
Interestingly, representatives of FFIN Brokerage Services by all means disown the name of Turlov and the fact that their Kazakhstani representative office is doing business with Freedom Finance structures. Although, according to the Agency for Regulation and Development of the Financial Market, FFIN Brokerage Services clients in Kazakhstan are served by two subsidiaries of Freedom Holding Corp. — Freedom Finance JSC and Freedom Finance Global PLC.
More than 56 percent of Freedom Holding’s revenue came from FFIN commission payments last year, according to the Financial Journalism Foundation, and in 2021 it was more than 65 percent. However, what Freedom Holding does to earn commissions is not entirely clear. However, the two companies are so intertwined – Freedom Holding’s senior managers use FFIN email accounts – that it’s unclear in what sense the two companies are separate.
Freedom Holding by Timur Turlov: a pyramid scheme, a scheme to withdraw Russian money from sanctions, or a giant laundry room for corrupt officials?
Based on a study of the activities of Timur Turlov’s Freedom Holding and FFIN, the Financial Journalism Foundation came to conclusions that are rather alarming for Turlov’s clients.
A financial services firm has, in an incredible way, become one of the fastest growing companies on the planet. It is listed on the Nasdaq and listed in Las Vegas, but for all intents and purposes it operates primarily in Kazakhstan.
Freedom Holding’s skyrocketing profits were the result of obscure and non-transparent business practices that its management is reluctant to discuss, the Financial Journalism Foundation’s investigation found.
Among these is Freedom Holding’s close relationship with FFIN Brokerage Services, a Belize-based securities trading firm owned by Timur Turlov. He is also a billionaire, founder and majority shareholder of Freedom Holding. Even the most experienced investor is not aware of the scale of FFIN’s transactions with Freedom Holding.
But FFIN’s own annual report should give Freedom Holding’s investors pause: in just one year, FFIN’s assets rose nearly 1,100 percent to over $2.5 billion. This is significantly more than the assets of Freedom Holding. Should FFIN ever find itself in dire financial straits, Freedom Holding could be in serious trouble.
Another factor in general almost directly says that the Freedom Finance corporation has signs of a pyramid. The fact that the structure of Turlov – an ordinary pyramid – was written earlier. But here’s what the Financial Journalism Foundation report says: “Freedom Finance Europe Limited, the Cyprus arm of the corporation, has achieved astronomical earnings growth unmatched on Wall Street. Although the Cypriot division reported a loss of US$30,000 in 2017, by 2019 it had a profit of US$33.8 million. In 2020, the subsidiary’s revenue rose to $80.4 million… In the nine months ended December 31, Freedom Holding reported a net income of $90.1 million, of which $80.4 million came from the Cypriot subsidiary. It took only 13 employees and $6.3 million of capital to create this amount.”
Against the backdrop of this fantastic profitability of the Cyprus division of the corporation, it is noted that all other branches, including the Russian and Kazakhstani ones, in which the main number of clients are concentrated, “experience constant problems with cash.”
In addition, many researchers of the activities of Timur Turlov, who is the official holder of 72.56% of the shares of Freedom Holding Corp, argue that he is just a formal front for one of the Russian oligarchs. The topic has not been fully explored, but such a possibility is quite real – especially considering how the class of oligarchs was formed in Russia.
Among the possible beneficiaries of Turlov, several names are named, but the most likely candidate is the ex-head of PJSC Rossetti Pavel Livinsky, who now heads the Department of Energy of the Government of the Russian Federation. And Turlov and his financial knowledge were needed by Livinsky to withdraw money obtained by mining cryptocurrencies at the facilities of Rosseti PJSC.
Although there is no reliable confirmation of this version, Turlov’s activities, which concentrate on the withdrawal of capital from the ruling elites of the countries in which Freedom Holding Corporation is represented, suggest that its adherents are not so wrong.
Whatever the structure of Timur Turlov is – a pyramid scheme, a scheme to withdraw Russian money from sanctions, or a giant laundry for corrupt officials of the post-Soviet countries – all its investors who invested money in the hope of profit risk one day being left with nothing.
