Azerbaijani ruling elite linked to secret Malta investments

A journalistic investigation has revealed that Azerbaijani President Ilham Aliyev’s children used a network of offshore companies as cover for multimillion-dollar investments.

A network of investigative journalists at the Daphne Project broke the story on Monday. The project was named after Maltese investigative journalist Daphne Caruana Galizia, who was assassinated in October 2017. Caruana Galizia had been reporting on both corruption in her home country of Malta, as well as investigating the the Maltese bank accounts of leading Azerbaijani families.

According to the report, the children of Azerbaijan’s ‘two most powerful officials’, Azerbaijani President Ilham Aliyev and Minister of Emergencies Kamaladdin Heydarov ‘used dozens of offshore companies as cover for investments in luxury properties, businesses, and high-end hotels across Europe and the Middle East’.

The private Malta-based Pilatus Bank was allegedly instrumental in stashing profits and funnelling millions of dollars into new investments, with over 60 bank accounts belonging to the children of Azerbaijani officials holding the majority of the bank’s €250 million ($305 million) in deposits by 2016.

‘The previously unreported assets include one of the biggest conglomerates in Azerbaijan [Gilan Holding], a five-star hotel and more than three dozen other luxury properties in Dubai, French porcelain and linen factories, a villa in southern Spain, and a hotel development in the Republic of Georgia’, the report said.

The later referred to a supposed €2.5 million ($3 million) investment in the Soviet-era Meshakhte sanatorium in the resort town of Tskaltubo in western Georgia, where there are reportedly plans to build a four-star hotel.

Aliyev’s daughters, Leyla and Arzu Aliyeva, did not respond to the journalists’ request for comment. Lawyers for Heydarov’s sons, Nijat and Tale, said their ‘clients are the beneficial owners of companies […] which have entirely legitimate and lawful business’.

While the report doesn’t suggest any wrongdoing, it has raised questions on the transparency of the finances of the Azerbaijani ruling elites as well as showing that banks operating in EU countries can be instrumental in hiding and managing assets of worldwide authoritarian elites.

Transparency International condemned Pilatus Bank, writing that the investigation ‘suggesting that the Pilatus bank of Malta was used to launder millions of dollars for the ruling family of Azerbaijan and their associates should be a wake-up call on beneficial ownership transparency for world’s richest nations’.

‘The corrupt shouldn’t be able to hide behind complex legal structures to open accounts, make investments, and purchase luxury goods’, the statement further reads. ‘We should be able to know who the individuals behind companies are, and where the funds for their investments come from. Transparency International urges countries to take swift action to end anonymous companies, in particular the establishment of public registers of beneficial ownership.’