The London-Kazakhstan connection | FinancialTimes

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

Marc Filipino
Hello from the Financial Times. Today is Friday, January 14, and it’s your FT News Briefing.

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Everyone says desktop space is dead, but, you know, don’t tell Google. And it’s not a household name yet, but mighty market maker Citadel Securities could go public. Additionally, 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 gaining a set of services that it can sell to new world powers.

Marc Filipino
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 huge new headquarters he is building right next door. It comes as millions of square feet of UK office space have been closed or converted to other uses. Google said it views the desktop as a place to collaborate and connect in person. Part of the new investment will be used to reallocate 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 a government crackdown has killed more than 160 people.

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These protests have been fueled by frustration with the government, decades of post-Soviet autocracy and growing inequality. Basically, the ruling elite of this resource-rich country controls most of the wealth, and much of that wealth is in London. But the city is not just a place where Kazakh elites put their money. FT investigations correspondent Tom Burgis said London had become something of a headquarters for the global elite. He has written a book about it, and here he links the recent protests to the British capital.

Tom Burgis
So one of the first places where the protest broke out recently was Zhanaozen, which is an oil town, as I understand it. And almost exactly 10 years ago, this was the place where Kazakhs found out what happens to you if you go through a kleptocracy. And, there were demonstrators in the town square, they were 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 way. And it turns out that a few weeks later, the president, Nazarbayev, who was to give a speech at the university of Cambridge, knew that you had to wear a different face when giving a speech at the university of Cambridge, so he turned to someone whose board had been active in Kazakhstan, and that was a brilliant communicator, Tony Blair.

Marc Filipino
. . . Like with the former British Prime Minister. Tony Blair then ran a consulting firm and worked with Central Asian regimes. As Kazakh dictator Nursultan Nazarbayev prepares to go to Cambridge, Blair sends him a document.

Tom Burgis
In the document I saw, he sends him his advice on how to turn this massacre around so that Nazarbayev looks like he is defending stability in an unstable region. And Nazarbayev goes ahead and does it. He goes to Cambridge and gives his speech and describes himself as that bastion of stability rather than someone presiding over the murder and torture of his own people. And I think that’s a pretty stark example of how it sometimes has to be said with good intentions that these great western figures can help legitimize and prolong the rule of these kleptocrats.

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

Tom Burgis
London, you know, is very slowly losing an empire and gaining a set of services that it can sell to new world powers. 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 origins of your immense wealth. You have a state agency that will help you invest huge sums in UK property; the Kazakh regime put in about half a billion. You have concierge services; people who will put your children in good schools and who will whitewash your family as you might whitewash your fortune. And then you have the best PR companies that will serve you as well as any propaganda operation. And then you have the private spies in Mayfair. You have everything you could wish for to try to make believe that an illegitimate and corrupt regime is the legitimate will of the Kazakh people here, and to cement your power by restoring your image and creating political alliances abroad, and also the ability to target your enemies using those spies and private lawyers and the press and so on. Thus, a full range of services available in one afternoon in London.

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

Tom Burgis
Especially since there are more and more deaths in the UK like the Litvinenko case, but also, you know, the attempted poisoning in Salisbury. Plus a realization that it is not without cost to be open to these kleptocratic interests coming to the UK. And I think as there’s a growing awareness, particularly among MPs, of the kind of national security implications of being tied to these kinds of regimes, there’s now a push for greater regulation , better-funded law enforcement, and greater attention to the national security risks of this.

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

Tom Burgis
In theory, anyone with significant control over a UK registered company should be identified at Companies House, right? So there should be a public record of this because the only thing this whole business is based on is corporate subterfuge and secrecy and the ability of kleptocrats to disguise their holdings. Now, in theory, the UK has some of the best legislation on this, but it’s not enforced. There is all sorts of nonsense at Companies House and clearly fake documents, thousands and thousands no doubt. It is the same with the institution of white collar crime, for example, the Serious Fraud Office has seen its budget constantly reduced by these years of austerity. He constantly receives political criticism, sometimes for bad mistakes he made in his underfunded way. So I think the UK is aware of this problem, but is not about to commit to solving it.

Marc Filipino
It’s Tom Burgis. He is the FT’s investigative correspondent and the author of the book Kleptopia: how dirty money takes over 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 two major venture capital firms. Now that’s 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
This is one of the biggest plumbing pieces behind the US financial markets that most normal people have never heard of.

Marc Filipino
This is, of course, our Markets Editor, Katie Martin.

Katie Martin
It handles like a huge part of stock trading, stock trading. That’s something like 27% of all trades that are executed on 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 cater to amateur investors like Robinhood and so on, they effectively send their trades to Ken Griffin’s Citadel Securities to get the trades done.

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

Katie Martin
This huge market maker could end up being a publicly traded stock itself, and that would be really fascinating because, as I mentioned, Citadel Securities does a lot of the back-end trade execution. end for Robinhood. And I’m sure you remember a year ago Robinhood was . . .

Marc Filipino
Oh yes . . .

Katie Martin
. . . instrumental in this huge explosion of commerce in GameStop. The fact that at some point Robinhood had to say, OK, there are too many people buying this stock right now, we need to turn it off and stop people from doing it, conspiracy theories online, and they are largely completely pulled out of nowhere but nevertheless very deeply believed is that somehow Ken Griffin had something to do with it, and that Citadel Securities was instrumental in the trade stoppage. And there are plenty of people in the amateur investing world who are still incredibly angry, rightly or wrongly, with Ken Griffin and Citadel Securities. So the idea of ​​him hitting the public markets himself, I think, would be right, it’s just going to be fascinating. I can not wait.

Marc Filipino
That’s FT Markets Editor Katie Martin.

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The Kremlin said yesterday that the United States and NATO had failed to address its security grievances. The two sides met this week to try to defuse the threat of military action by Moscow in Ukraine. What’s next for Russia and Europe? Join me on Twitter Spaces for a discussion about it, with our top writers and correspondents covering the story. The conversation begins at 12:00 p.m. EST, 5:00 p.m. London. We’ve put a link to the conversation in the notes for today’s show.

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You can read more about all these stories on FT.com. This has been your daily press briefing on FT. Be sure to check back next week for the latest trading news.

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The FT News Briefing is produced by Fiona Symon and I, 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 by Metaphor Music.

This transcript was generated automatically. If by any chance there is an error, please send the details for a correction to: [email protected]. We will do our best to make the change as soon as possible.

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