Andrew, a secret deal and a very disturbing conflict of interests
So is this how the jetsetting Prince could afford a £13m ski chalet?
WITH its awe-inspiring views of the Swiss Alps, living rooms stuffed with antiques and a master bedroom that’s draped in animal furs, Chalet Helora is rightly regarded as one of Verbier’s most exceptional luxury properties.
The seven-bedroom pile boasts a 650 sq ft indoor swimming pool, sauna, sun terrace, boot-room, bar and opulent entertaining area. Neighbouring homes are owned by Sir Richard Branson, the singer James Blunt and a host of ski-loving billionaires.
Little wonder that visiting members of the jet- set have in recent years chosen to pay around £22,000 per week to rent the chocolatebox retreat, where visitors are looked after by six members of staff.
However, that was before Christmas 2014 when the chalet, which sits on a large area of Europe’s priciest real estate, was quietly bought by the Duke and Duchess of York.
The divorced couple splashed an estimated £13 million on the property to give their daughters Beatrice and Eugenie a permanent home in the exclusive resort.
Details of their investment emerged last year at a time when the Duke was facing awkward questions about his pally relationship with the wealthy American sex offender Jeffrey Epstein.
Yet behind the scenes — and rather lost in the headlines surrounding that scandal — was another, perhaps equally tricky, question being asked by royal watchers.
Namely: how on earth could the Royal couple possibly afford to buy the spectacularly expensive Chalet Helora? The Duchess of York is, of course, perennially short of cash and has in recent times toiled to pay off millions of pounds in debts.
And Prince Andrew has no obvious source of income aside from a small Navy pension and an allowance from the Queen, which is supposed to fund his private office.
Indeed, like all Royals, whose wealth is generally tied up in estates, paintings, jewels and trusts, he is not, on paper, particularly cash rich. Yet he appeared to have a spare £13 million to acquire a holiday home.
What is more, ‘ Air Miles’ Andrew has, in recent years, lived like a free-spending billionaire, holidaying on yachts and travelling the world by helicopter and private jet.
Some of his overseas trips involve official duties. Others are taken on personal business.
Often, the Palace vaguely describes journeys as having been ‘paid for privately’, as they did when he flew to China on a mysterious 48-hour visit last month.
In addition to his travel costs, the Prince must also financially support his globe-trotting daughters Beatrice and Eugenie. What is more, he has additionally spent £ 7.5 million refurbishing Royal Lodge, his home in Windsor Great Park.
Quite how he’s funded all of this has never been clear.
Andrew did enjoy a mysterious windfall in 2007, when his marital home, Sunninghill Park, near Windsor (which had languished unsold for five years) was bought by oligarch Timur Kulibayev, son-inlaw of Kazakhstan’s autocratic president, Nursultan Nazarbayev.
Yet even the £15 million raised by that extremely odd deal, in which the home sold for £3 million more than the asking price, doesn’t come close to matching his recent outgoings.
‘I would compare Andrew to a hot air balloon,’ is how one acquaintance describes it. ‘He seems to float serenely around, in very rarefied circles, without any visible means of support. No one has ever had a clue how he pays for it.’ Until now, that is. For today, the Mail is able to shed light on the Prince’s mysterious finances, revealing one possible explanation as to how he affords his turbo-charged lifestyle.
We can show that he’s leveraged his royal status and the wealthy contacts made during the course of official work on behalf of British taxpayers to act as a ‘ fixer’ helping foreign companies pursue lucrative business opportunities in Kazakhstan, one of the world’s most corrupt dictatorships. One such venture was carried out in 2011, under utmost secrecy.
It saw the Prince use his relationship with a highly influential Kazakh oligarch called Kenges Rakishev to discreetly help a Greek sewerage company and a Swiss finance house to bid for infrastructure contracts worth an estimated 500 million euros (£385 million).
The firms were Aras Capital, from Zurich, and EYDAP, Greece’s largest water company, which had formed a consortium hoping to build water and sewerage networks in the capital Astana, as well as Kazakhstan’s largest city Almaty.
Had the deal gone through, the Prince would have been offered a commission fee of 1 per cent of its overall value — £3.85 million — according to a senior figure involved. In an extraordinary conflict of interests, Andrew helped the Swiss and Greek companies at a time when he was supposedly employed full-time as this country’s roving ‘trade ambassador’, promoting British firms abroad.
Over the final decade in which he performed that official role, supporting Andrew cost taxpayers £4 million. His police protection officers racked up a bill of £10 million.
The public money was spent so that the Prince could support UK Plc — rather than any foreign firms.
In a second conflict of interests, Mr Rakishev, the Kazakh oligarch at the centre of the deal, also happens to be the one who negotiated the (for Andrew absurdly lucrative) sale of Sunninghill Park — which has been demolished within the past few weeks — on behalf of the President’s son-in-law Mr Kulibayev.
All of which will doubtless come as a surprise to British politicians and public alike. After all, Buckingham Palace has never discussed the Duke of York’s business career.
The public has never been told he’s acted as a ‘fixer’ or consultant who introduces business people to
He used his status to act as a ‘fixer’ in a corrupt dictatorship
his personal contacts who can help enrich them. Buckingham Palace has also always insisted that the sale of Sunninghill Park was in no way connected to any ‘side deals’.
They have described claims that the Duke would pursue any other ‘commercial arrangement’ related to it as ‘completely false’.
In keeping with this long-standing policy of omerta, the Prince’s spokesman David Pogson was not forthcoming about his dealings with the Swiss and Greek firms when first approached by the Mail this week.
He began by issuing a written statement, formally denying that Andrew had ever helped the Swiss firm Aras Capital, the Greek company EYDAP, or any other private organisation pursue business in Kazakhstan.
The statement also denied Andrew had introduced the firms to the oligarch Kenges Rakishev or contacted him on their behalf.
‘His Royal Highness works to promote economic growth and skilled jobs creation in the United Kingdom and has not acted on behalf of any international company,’ Pogson claimed.
However, the Mail then provided the Palace with a copy of an email the Prince had sent to Mr Rakishev on behalf of EDYAP and Aras on April 14, 2011.
Initially, the Palace suggested the email was a forgery. However, a few hours later, they changed their tune and instructed the law firm Harbottle & Lewis to attempt to block the publication of this story by claiming that, while the email was genuine, publishing it would breach the Prince’s privacy.
The Mail countered by arguing that the email laid bare a financial and political story that is clearly in the public interest.
And so we can now detail the way the Queen’s 56-year- old son used his status and contacts made on official duty — at British taxpayers’ expense — to pursue the £385 million deal on behalf of his Greek and Swiss chums.
The murky tale dates back to late 2010, when EYDAP, an Athensbased company, which is part stateowned, sought to expand into foreign markets under the leadership of its then boss, Nikos Bardis.
A deal to build a water and sewerage network in Libya was promptly signed, but then fell apart in early 2011 during the political chaos of the Arab Spring.
An 120 million euro (£93 million) deal for EYDAP to supply water to Azerbaijan hit trouble after several months of negotiations.
‘We realised that there comes a point when you are dealing with very corrupt countries in the developing world when you need to grease people’s palms and get backing from senior politicians in order to get a contract signed off,’ says a senior source at the Greek firm.
‘But for EYDAP, that presented a big problem. We are publicly owned and so follow strict compliance rules. We can’t just employ consultants or lobbyists, let alone pay bribes or make so-called commission payments.’
As a result, when EYDAP heard of another potential business opportunity in Kazakhstan in April 2011, its chief executive Mr Bardis decided on a new tactic: bidding for the work as part of a consortium.
To help finance the bid, he therefore teamed up with Andrea Bubb, a financier who worked at the Zurich-based Aras Capital.
In order to gain the essential political clout required, he brought in Prince Andrew, an acquaintance he’d apparently met years earlier while working in London.
Andrew was in a useful position with regard to Kazakhstan since he already had close relationships with a number of influential business leaders and politicians there.
In addition to his friendships with the oligarch Kenges Rakishev and the President’s son- in- law Timur Kulibayev, he’d been goose-hunting — as you do — with despotic President Nazarbayev years earlier.
More recently, in April 2010, he’d visited the country on a British taxpayer-funded official tour, meeting the prime minister and a host of business leaders and political figures. In January 2011, he met the Kazakh prime minister at the economic summit in Davos, Switzerland.
On April 14, 2011, the Prince duly set to work exploiting some of the contacts this official work had given him. That morning, he phoned Kenges Rakishev, whose father just happened to be the mayor of Astana, asking him to help the bid for work assisting its water authorities.
At 2.59pm, Andrew sent a follow-up email with the subject line ‘our call’.
‘Dear Kenes [sic]. Below is the Water plan,’ began Andrew’s message. ‘We would like to discuss the potential of supporting (by providing technical/environmental solutions applying immediate measures as well as capacity building initiatives) the Water Company and/or Water Authority in their efforts to improve the present level of services in water and sewerage.’
The Prince went on to explain the ‘lead consortium member’ was EYDAP, whose boss, Mr Bardis, would soon be visiting Kazakhstan with the Swiss financiers to take meetings.
Finally, Andrew said he’d instructed his Private Secretary, Amanda Thirsk, to introduce Aras Capital to other senior political figures in Kazakhstan.
‘Amanda in my office has put Andrea Bubb [of Aras Capital], with whom I am connecting you, in touch with [the] Deputy Head of the PM’s office. I will put Andrea in touch with you by email now that I have sent you this background email.’
Intriguingly, Andrew’s message ( which, it should be observed, described the consortium as ‘we’) was sent not from an official UK government email account, but instead via a private one hosted by Unitech, a little-known computing firm based in Chalfont St Giles, Buckinghamshire, which happens to boast a Royal Warrant.
Entertainingly, Andrew’s emails appear in recipients’ inboxes with the title ‘the Duke’.
The effect of his message was immediate: the following day, Andrea Bubb emailed the oligarch Kenges Rakishev saying that she and Mr Bardis, along with a third investor, planned to visit Kazakhstan the following month.
‘We plan to visit Kazakhstan in May. There will be three representatives from our side. Would it be possible for you to organise meetings with the relevant people from your side?
‘I look forward to meeting you in person during our visit.’
The oligarch Rakishev, for his part, appears to have been only too happy to help someone who was a contact of his great friend Prince Andrew.
A fortnight later, just before the visit, Andrea Bubb again emailed Kenges Rakishev, asking if he could set up meetings with the mayors of Astana and Almaty, and representatives of local water authorities.
‘If it is possible to cover both cities in one trip, we are happy to do that,
He went goose hunting with the despot president
even if it means staying longer than one/ two days!’ read her email, which contained detailed business pitches. She even got him involved in organising details of their travel arrangements, asking: ‘Would you be organising the visas for us or would we have to take care of that ourselves?’
The ease with which EYDAP and Aras Capital were able to gain access to influential Kazakhs perhaps speaks volumes for the value of Prince Andrew’s contacts book. And what is good for the Duke also tends to be good for his wealthy friends.
So, Kazakh financier Kenges Rakishev soon began discussing other lucrative business opportunities with representatives of EYDAP and Aras.
On May 23, for example, Rakishev and Andrea Bubb began also discussing ‘mining opportunities’ in the resource-rich country, in an email that spoke of ‘transactions on the table’ involving a gold mine called Taldybulak and a zinc firm called Shalkiya Zinc.
As for the Greek water company’s Mr Bardis, he appears to have attempted to set up a side-deal that would have seen Rakishev — who is the chairman of several major Kazakh banks — invest in a Greek tobacco company.
The communications manager of EYDAP, Margarita Gamaletsou, emailed a detailed ‘ company profile’ of the firm to Rakishev on behalf of Bardis on July 28 ‘in case there is any interest’.
The following month, she emailed to fix a meeting between the oligarch and Mr Bardis at an upcoming conference in Astana.
When approached by the Mail this week, Ms Gamaletsou at first denied knowledge of the emails before admitting she had, indeed, typed them ‘because of my good command of the English language’, but was unaware of their ‘scope or background’.
For his part, Mr Bardis, now retired, said he ‘knows’ the Duke of York, but declined to comment further when shown the emails. And EYDAP’s former chairman, Themistoklis Lekkas, told me this week that he was aware that Bardis was pursuing work in Kazakhstan at the time, but that ‘it never got to the stage where the board was asked to sign something off’.
Meanwhile, the water deal continued to gain momentum, and talk at EYDAP began to turn to Prince Andrew’s potential fee.
‘The Prince had put us in touch with people who mattered in Kazakhstan, which was completely invaluable,’ recalls a senior company source.
‘At moments when the deal looked like flagging, he was a huge help. For example, there was a time when we were trying to set up a meeting with a senior politician whose diary secretary wasn’t being much help.
‘She was sent a message saying that His Highness would be very pleased if the meeting took place. Within minutes it was booked.
‘Our work in Azerbaijan would have pulled in 120 million euros over the same period, but that was to supply six million households with water and sewerage. The job in Kazakhstan was to supply 40 million homes.
‘ I estimated it to be worth 500 million euros over the first three years. But we’d have had an option to renew the deal for 20 years. These are big, big sums.
‘Our feeling was that if it went ahead, a fair commission for the Prince would be 1 per cent, or around five million euros.’ In other words, it seems the Prince was in line to receive nearly £4 million for sending a few emails.
If that was the case, doesn’t it seem entirely possible he has been doing the same kind of thing with other firms and in other countries?
What was he doing, for example, flying into China for just 48 hours last month?
And if similar sums have been involved in other ventures, isn’t it likely he could have secretly built up a very considerable fortune indeed without really breaking sweat, on the strength of his line- age — and his taxpayer-funded role as a trade ambassador?
The Palace would surely claim not. But if that was the case, then £ 13 million for a Swiss chalet might seem like small change.
Coincidentally, 1 per cent is exactly the same commission that the Duchess of York was recorded on tape in 2010 — in a red-top tabloid newspaper sting — demanding in return for access to Prince Andrew.
The sum, in addition to a £500,000 down payment, would ‘open any door you want’, she told an undercover reporter from the News of the World, who had posed as a wealthy businessman seeking to meet the Prince.
‘Look after me and he [Andrew] will look after you,’ she claimed. ‘You’ll get it back tenfold.’
In both cases, the commission was apparently to have been paid on a discretionary basis, as and when a deal came off.
A Greek company source says: ‘EYDAP didn’t have a contract with Prince Andrew. We frankly couldn’t sign that sort of a deal anyway, for reasons of compliance. So any payment would have been discretionary and would have been made via [the Swiss consortium partners] Aras Capital. Cash would have been offered after a deal was signed.
‘By September 2011, we were getting quite close to that point.’
Sadly for those concerned, the project came to naught.
In November 2011, with negotiations still ongoing, Kazakh police opened fire on a group of striking oil workers in the city of Zhanaozen, killing 14 of them.
In the ensuing fall-out, oligarch Kenges Rakishev’s long-standing business partner Timur Kulibayev, the owner of Prince Andrew’s former home Sunninghill Park, was sacked as head of Samruk-Kazyna, the state sovereign wealth fund.
Fearing they would again be caught up in political turmoil, as had happened to costly effect in Libya, the Greek water company pulled out.
This week, a spokesman for the firm refused to comment on the affair, saying that all those involved had since left.
In Switzerland, Andrea Bubb said she had left Aras Capital in 2013 and was not prepared to discuss her business relationship with the Duke of York.
Meanwhile, Peter Zurcher, current president of Aras Capital, said the firm had been under new ownership for two years and he had ‘absolutely no knowledge’ about its activities before then.
As for the Duke of York, his lawyers last night attempted to block publication of the Prince’s leaked 2011 message to Kenges Rakishev on the grounds that it amounts to ‘unlawful processing of personal data’.
They also declined to withdraw their original statement that Andrew played no role in trying to set up a deal for a Greek sewerage firm and a Swiss finance house to invest in Kazakhstan in 2011.
The Palace is, of course, perfectly entitled to stand by its categorical denials. But they look, at best, questionable. For as we have seen, the emails the Prince actually wrote tell a very different story.
The question now is whether this highly dubious piece of international business is the tip of an iceberg that has made Prince Andrew very rich indeed.
Was deal the tip of a lucrative iceberg?