Offshore companies provide link between corporate mogul and Azerbaijan’s president08/06/2019
Members of Azerbaijan’s first family have had been shareholders in at least four offshore companies, newly revealed records show.
A corporate mogul whose business empire has won building contracts worth billions of dollars amid Azerbaijani President Ilham Aliyev’s massive construction spree is tied to the president’s family through secretive offshore companies.
The businessman, Hassan Gozal, is the director of three British Virgin Islands (BVI) companies set up in 2008 in the name of the president’s daughters, according to secret documents obtained by the International Consortium of Investigative Journalists.
The daughters were 19 and 23 years old at the time.
The documents obtained by ICIJ also show that the president and his wife, Mehriban, a member of Parliament, acquired their own BVI company in 2003, Rosamund International Ltd.
Why the presidential family established these companies is unclear. What is clear is that the family took steps that obscured its involvement in the companies, using various agents to register the companies and direct them, at least on paper.
The presidential family and Gozal did not respond to ICIJ’s repeated requests for comment.
The timeline of Ilham Aliyev’s ownership of the offshore company raises questions about whether he violated constitutional provisions against members of Parliament operating or owning businesses, according to Annagi Hajibeyli, president of Azerbaijani Lawyers Association, a group that is often critical of the government.
Ilham Aliyev was still serving in Parliament when he was director and shareholder of the offshore company in early 2003. Aliyev became president of Azerbaijan in October of that year. The records show that the BVI company was in good standing until May 2004.
In addition to the constitutional provisions relating to members of Parliament, Azerbaijani law also forbids state officials involved in overseeing business from being involved in business themselves, including being shareholders in companies, according to Hajibeyli and Alimammad Nuriyev, a lawyer and director of the Azerbaijan’s Constitution Research Center.
“Ilham Aliyev violated this law if he was involved in business activities during the period when he was a member of Parliament . . . or president,” Hajibeyli asserted.
ICIJ send questionnaires to Ilham Aliyev and his wife Mehriban via email and post mail. The president’s press office offered no response to the questions raised by ICIJ. Letters sent to the president’s daughters, Leyla and Arzu Aliyeva, also went unanswered.
Arzu and Leyla Aliyeva acquired their BVI companies in December 2008, two months after their father was re-elected for a second term as president, the secret documents show.
Arbor Investments was registered under Arzu’s name. Leyla is listed as the owner of LaBelleza Holdings Limited and Harvard Management Limited. For all three companies, the same offshore middleman was used — Malaysia-based Naziq & Partners — and all are registered by Portcullis TrustNet, a Singapore-based offshore services provider.
In registering the companies, the young women listed addresses in Dubai: two apartments in a luxury resort called Marina Le Reve. Other apartments in the building, one of the area’s most exclusive towers, are more than 6,000 square feet each and have asking prices close to $6 million.
Hassan Gozal, the corporate mogul listed as a director of Leyla and Arzu Aliyeva's companies, is a busy man.
He and his brother, Abdolbari, both originally from Iran, conduct a wide range of businesses, mostly out of Dubai’s Jebel Ali Free Trade Zone. Hassan Gozal is the CEO of as many as a dozen companies operating under the umbrella of a mega-company called Intersun Holding, where Abdolbari is president and Hassan vice president.
Documents show the Gozal brothers’ business interests have won major contracts from Azerbaijan’s state-owned oil company, where Aliyev served as an executive before becoming president.
The brothers have also benefited in indirect ways from the country’s oil wealth — thanks to an oil money-financed building boom that’s transformed the cityscape of Azerbaijan’s capital, Baku, into a forest of high rises.
In all, their companies have won construction contracts in and around Baku totaling some $4.5 billion:
Their holding company, Azersun, is building an ambitious resort development, the $2 billion Dream Island, which will cover 300 hectares near Baku.
Another company they control, Dia Holdings, has won $2.5 billion in construction contracts in Azerbaijan, much of it financed by public money. Dia’s projects include the Fairmont Flame Towers in Baku, three curving glass-walled buildings whose shape in part pays homage to the vast natural gas deposits in the region. Dia is also behind luxury villas built for the presidential administration and the Heydar Aliyev Center, named for the president’s father, who was his predecessor as the country’s chief executive.
Hassan Gozal did not respond to repeated attempts by ICIJ to seek comment from him via email and telephone.
Baku's dramatic Flame Towers: part of Azerbaijan's oil-financed building boom.
Questions have been raised for years about the first family’s financial dealings.
In 2010, The Washington Post found $75 million worth of real estate in Dubai whose owners had names and ages appearing to match those of President Aliyev’s three children. Nine mansions were purchased in 2009 for about $44 million, far more than President Aliyev’s $228,000 annual pay, the Postnoted, and “roughly 10,000 years’ worth of salary for the average citizen of Azerbaijan,”
According to Dubai property records, the purchaser of the mansions, Heydar Aliyev, was 11 years old at the time. Arzu and Leyla’s younger brother, Heydar, has a matching birthdate.
Documents obtained by ICIJ show the parents acquired their own offshore company, Rosamund International Ltd., in early 2003, using a reseller of offshore entities in Singapore, DBS Trustee Limited. The couple were named as directors and shareholders, listing a personal address in the Jebel Ali Free Zone in Dubai.
Ilham Aliyev ascended to the presidency in Azerbaijan shortly after the company was created. The company became dormant in 2004.
In addition to the offshore companies purchased in 2003 and 2008, the Aliyev family has been connected to several other ventures and investments:
Arzu Aliyeva was co-owner of Silk Way Bank, a unit of SW Holdings, a firm that controls in-flight meals, airport taxi services, airline maintenance, ticketing and duty-free shops, according to a 2010 report by Radio Free Europe/Radio Liberty.
Azerfon, one of the biggest cell phone operators in Azerbaijan, was co-owned by offshore companies in Panama that listed the Aliyeva daughters as president and treasurer, according to a 2011 story by Radio Free Europe/Radio Liberty.
Arzu Aliyeva owned a house worth $1 million in the Czech luxury resort Karlovy Vary, according to a 2012 articlefrom the Organized Crime and Corruption Reporting Project. The $1 million house in Karlovy Vary owned by Arzu Aliyeva. Photo: OCCRP
Father and son
On paper, Azerbaijan is making strides towards accountability. The country has signed several international agreements relating to transparency and corruption.
Corruption prosecutions, however, have largely been confined to low-level officials, according to Global Integrity, a Washington-based research and advocacy group. Another anti-corruption group, Transparency International, ranked Azerbaijan 139th out the 176 countries on its 2012 Corruption Perception Index. Reporters Without Borders puts Azerbaijan 162nd out of 179 countries on its 2011-2012 Press Freedom Index.
The Aliyev family has held power in Azerbaijan for decades, long before the country was a country.
President Ilham's father, Heydar Aliyev, was member of the NKVD, the Soviet secret service, in the 1940s, and in the 1960s became the head of the Azerbaijani KGB. In 1969, he became the leader of Soviet Azerbaijan, a position he held for almost 20 years, until he was forced to resign amidst corruption charges.
After the Soviet Union collapsed in the early 1990s, Aliyev regained power in the wake of a military coup, taking over presidential powers and then formally winning the presidency in a national election in October 1993. He remained president for a decade.
Just before his death in 2003, his son Ilham inherited the country’s leadership from him, winning the presidency in an election that many outside observers claimed was rigged in the son’s favor.
In June 2012, in the wake of media reports about the presidential family’s business interests, Azerbaijan’s parliament voted to put a veil of secrecy over information about companies based in Azerbaijan, restricting public access to details about corporate registration and ownership.
The parliament also voted to give the president and first lady lifetime immunity from criminal prosecution.
Another Azerbaijani reporter who wishes to remain anonymous for safety reasons contributed to this story.
Contributors to this story: Khadija Ismayilova