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  • Azerbaijan's Czech Enclave

    AZERBAIJAN’S CZECH ENCLAVE

    https://reportingproject.net/occrp/index.php/en/ccwatch/cc-watch-indepth/1666-azerbaijans-czech-enclave

    Thursday, 11 October 2012 12:46


    By Pavla Holcova, Khadija Ismayilova and Jaromir Hason

    At Heydar Aliyev Airport in Baku, you can always count on the
    business class checkin line at the Azerbaijan Airlines Prague flight
    being just as long as the one for economy class.

    That’s because Azerbaijan's ruling clique have made the Czech
    Republic a favored destination in recent years.

    They have come not just as high-end tourists to see its rich
    historical sites and natural beauty - but as investors as well.

    Officials of oil-rich Azerbaijan, including members of the Aliyev
    ruling family, have established companies in Prague, bought land, and
    built hotels and luxury villas most of them focused around in the
    famous spa city of Karlovy Vary (Carlsbad).

    The problem is that some of these investments are illegal.

    The full extent of their investment became clear after reporters for
    the Organized Crime and Corruption Reporting Project (OCCRP) examined
    the Czech property and company records of prominent Azeris. The
    political elite, it appears, has been playing a real life game of
    Monopoly in a race to acquire properties in the heart of the European
    Union.

    There is a historic precedent to the Azeri’s love of Karlovy
    Vary, famous for its natural springs, resorts, and high-quality
    glass. The picturesque town close to the German border in the
    western part of the Czech Republic has been an exclusive hideaway for
    the Russian ruling clique since 1711 when Czar Peter the Great came
    for treatment in its healing waters. Powerful and wealthy Russians
    continue to rest and mend amidst its expensive golf courses and
    spectacular spa colonnades. Most services, especially the high end
    ones, are offered in the Russian language. The local Czech hockey
    team at one point considered joining Russia’s national hockey
    league, and for most Czechs, Karlovy Vary signifies close and
    friendly ties with Russia.

    A Family Affair

    “Azeris know Karlovy Vary well,” said Jan Hornik, a Czech
    Senator. “Their [Azeri] Prime Minister told me once his trips
    to the town were more business than leisure because he met half the
    Azeri government there.”

    The connections start with the first family. Arzu Aliyeva, one of
    Azeri President Ilham Aliyev’s two daughters has been the sole
    shareholder of a central Prague-based company called ZODIAC
    Immobilienbesitz since 2006.

    A listing in the Czech land registry shows that the firm owns a
    €1 million villa in a luxury neighborhood in Karlovy Vary.

    zodiac2 The Azeri president’s daughter owns a luxury villa in
    the spa town of Karlovy Vary

    When reporters visited the hilly and posh residential neighborhood,
    the villa looked well cared for, but empty. No one answered the
    doorbell.

    The headquarters of Aliyeva's company are inside the Prague law
    offices of Alfery-Hrdina, a firm that does audit, tax and legal
    services according to a flyer. Pavel Alfery-Hrdina, a firm's
    representative, refused to talk about Aliyeva's company or any
    client’s business.

    Arzu Aliyeva is not the only family member with ownership of Czech
    businesses either. Her maternal grandfather, Arif Pashayev, owns
    another Prague and Karlovy Vary-based company, RETRO-INTER. Pashayev
    officially runs the National Aviation Academy. According to US
    diplomatic cables made public by Wikileaks, however, the extended
    family plays important roles in the Azeri economy. The US cables list
    the Pashayev family as the "single most powerful family in
    Azerbaijan".

    Pashayev controls PASHA Holding, an Azeri conglomerate involved in
    insurance, banking, travel, construction and investment interests
    including PASHA Bank, according to the companies website and an Ernst
    and Young audit which lists him as the man with ultimate control.

    The managing director is his son Mir Jamal Pashayev and the website
    brags it is one of the largest new companies in Azerbaijan.

    RETRO-INTER owns a number of properties in the Karlovy Vary area
    including the newly erected Hotel Jeseter.

    zodiac3_small Jeseter belongs to a company controlled by Arif
    Pashayev, the father of Azerbaijan's first lady

    Hotel Jeseter, which is finishing construction, sits on a bank facing
    a dam 10 minutes from the town. A forest runs along one side and an
    exclusive, gated Russian village on the other. The Russian deco style
    building sits on the ruins of a former fishing house and plans call
    for 30 rooms, a restaurant and two quays. The area used to be popular
    with locals who came to relax and bathe, but after the only natural
    swimming pool was demolished in ´90, the area lost its attractiveness
    for family weekends. The hotel is controversial, with believers
    seeing its opening as a chance to resuscitate the area, while
    skeptics worry that its monumental and inappropriate design is out of
    place and its high prices preclude ordinary Czechs from visiting.

    RETRO - INTER also owns a building site, a house and an apartment in
    the surrounding towns of Jeni¹ov, Mezirolí and Doubí.

    The Businessman

    While Arif Pashayev is the sole shareholder of RETRO-INTER, its
    director is another Azeri-born Czech citizen, Fakhraddin Mirzoev who
    lives in Karlovy Vary. In addition to RETRO-INTER, he is director of
    Swiss-based TERMA TRAVEL GROUP. Although they operate in Karlovy
    Vary, the company has a subsidiary in Prague,
    GLOBAL-ACCOUNTING-SERVICES.COM which shared offices with RETRO-INTER
    until a few months ago. Mirzoev is involved directly or through the
    TERMA group in a half dozen other companies in the Czech Republic.

    Mirzoev appears to be a successful and connected man in Azeri circles
    in the Czech Republic. He drives a Porsche, established a rally team
    sponsored by the TERMA TRAVEL RACING TEAM and knows important people
    like Hornik, according to his Facebook page.

    "I know Mr. Mirzoev, because the Azeri ambassador is my friend and
    when we had dealings, the representative of TERMA TRAVEL was often
    present,” said Hornik.

    OCCRP reporters contacted Mirzoev who did not comment but did say "My
    business is not connected to any other persons.”

    Mirzoev, who was an official agent of Azerbaijan Airlines, gave the
    official welcome to the first Azerbaijan Airlines flight that landed
    at the Prague airport in July of 2010.

    The non-stop flight between the two capitals regularly shuttles other
    major Azeri businessmen who have also chosen the Czech Republic.

    INFOGRAFIC-Azerbaijan-cehia_small

    A Cleric in Business

    Other important Azeri investors in the area are Javanshir Pashazade,
    a member of parliament in Baku and his brother, Allahshukur.

    Allahshukur Pashazade is Sheikh-ul Islam, Grand Mufti of the
    Caucasus and the chairman of the Religious Council of the Caucasus.

    He was counted in 2009 among the 500 most influential Muslim figures
    in the world.

    According to registration records, the brothers own a Czech company
    called Aynur KV that is also based in Karlovy Vary. The firm owns an
    apartment complex in the center of Karlovy Vary.

    Through his driver, Javanshir Pashazade denied any ownership of Czech
    businesses.

    zodiac6_small Allahshukur Pashazade, the Grand Mufti of the Caucasus,
    owns an apartment complex in the Czech Republic

    Allahshukur Pashazade is a controversial figure in the Azeri media.

    The government-friendly religious leader, who frequently pledges
    Muslim loyalty to Ilham Aliyev, is known in Azerbaijan for his
    connection to Ali Evsen, a Turkish businessman currently under arrest
    in Spain for his alleged involvement in a money laundering operation
    for Hussein Salem, a confidante of former Egyptian leader Hosni
    Mubarak. Evsen's businesses have been previously investigated here by
    OCCRP . Pashazade’s son is married to Evsen’s daughter.

    Azer Rashidoghlu, chairman of the "Tolerant" Center for Social
    Studies said the Grand Mufti should step down if the information is
    true.

    "There were lots of talks about a lack of transparency in The Board
    of Caucasus Muslims and the business activity of Sheikh-ul Islam. He
    always denied his involvement in business. He denied, because he knew
    that it is not appropriate. It is indeed not appropriate.”

    Rashidoghlu said such ownership sets up a fundamental conflict of
    interest.

    “If religious figure is dealing with business, especially in
    the countries like Azerbaijan, he is risking facing a choice between
    his business interests and the interests of Muslims.”

    Rashidoghlu says that may have already happened. The Grand Mufti has
    not defended Muslim rights against the President such as a ban on
    hijab in schools and the shutdown of mosques, he said.

    “Instead, he always pledged support to president and his family
    in order to be able to continue his business and to invest abroad."

    Javanshir Pashazade’s ownership is illegal under Azeri law
    according to one expert.

    zodiac4_small Brothers Javanshir and Allahshukur Pashazade, one a
    Parlamentarian and the other the Grand Mufti of the Caucasus, own an
    apartment complex in Karlovy Vary

    “Parliament members must not run businesses. It is prohibited
    by law. So if they own the business, they violate the law,”
    said Vasif Movsumov, executive director of the Anti-Corruption
    Foundation, a Baku based civil society organization. “The law
    restricts business activity - no matter, if it is inside or outside
    the country - of the parliament members.”

    They are not the only ones. OCCRP previously reported that Arzu
    Aliyeva along with her sister, Leyla and their mother Mehriban
    Aliyeva, own a slew of Panama-based companies through which they
    secretly control gold fields, a mobile phone company, a construction
    company and other high stake investments back in Azerbaijan. Mehriban
    Aliyeva is also a member of parliament. Calls and emails to the
    government seeking comment were not returned.

    “They are supposed to submit declarations and declare that they
    stopped their business activity. Since that was not the case, it is a
    clear indication of corruption.” Movsumov said.

    The apartment complex the Pashazades own through their firm is set in
    the hills overseeing the center of Karlovy Vary and sits near one of
    the most famous hotels in the region, the Hotel Imperial. This hotel,
    built in the early 20th Century hosted celebrities including the
    Russian Emperor Paul I, music composer Richard Strauss, Indian
    maharajas and Hollywood stars. The complex is surrounded by narrow
    streets with old houses and the original tessellated pavement.

    The permitting and construction of the modern apartment complex right
    in the middle of the historic center of Karlovy Vary was
    controversial. The modern architecture contrasts with the unique and
    picturesque surrounding buildings. The original building design was
    a story higher, but was lowered in the face of local protests says a
    local journalist, Jaroslav Dolina, who has followed the case for his
    newspaper Karlovarsky Denik. The complex is still partially empty and
    banners offering luxury apartments hang outside. Most of the names on
    the doorbells appear to be Russian.

    Other MPs in Business

    Another member of the Azerbaijani Parliament, Adil Aliyev and his
    brother Allahverdi Aliyev, also do business in the Czech Republic.

    Adil Aliyev is a shareholder in a company called West End Centre.

    This company owns land in the western outskirts of Karlovy Vary.

    Allahverdi Aliyev’s family started a company called RAN Ltd in
    2003 at the same Karlovy Vary address where two TERMA TRAVEL GROUP
    companies were based.

    zodiac5_small A number of Azeri connected companies are located at a
    downtown building in Karlovy Vary

    Back in Azerbaijan, the brothers built their career in the police
    forces under the leadership of a third older brother, Maharram
    Aliyev, a former chief of the Baku police department and currently
    the ambassador of Azerbaijan in Tajikistan. Adil Aliyev, who is also
    president of the Kickboxing and Muai-Tai Federation, entered
    Parliament in 2005 after leaving his job as a district police chief.

    Allahverdi Aliyev, who used to also be a mid-level official in the
    Ministry of Interior, shares ownership of his businesses, RAN Ltd.

    together with his wife, Tamara and son, Ruslan Aliyev. The son,
    according to an interview he gave to Azeri media, is the director of
    the Ateshgah Insurance group, owned by the State Oil Company of
    Azerbaijan. Adil Aliyev did not deny ownership of the businesses.

    "I can't say anything in this regard. I have lots of relatives in
    Czech Republic and they have many companies in Czech Republic. That
    is not a secret".

    He said he is aware of the legislation that prohibits Members of
    Parliament to run businesses but refused to comment further on the
    issue.

    Their RAN Ltd owns a house in the city center of Cheb, an old Czech
    town with a long Czech-German history about 43 km from Karlovy Vary.

    It also owns shares in an apartment complex in Doubi.

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