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Aliyev's Azerbaijani Empire Grows, As Daughter Joins The Game

The daughters of Azerbaijani President Ilham Aliyev: Arzu (left) and Leyla in Baku last month
The daughters of Azerbaijani President Ilham Aliyev: Arzu (left) and Leyla in Baku last month
By Ulviyye Asadzade and Khadija Ismayilova
BAKU -- On the drive between Baku's international airport and the capital center, travelers are met by a brigade of sleek roadside signs advertising a company called SW Holding.

But as innocuous as the posters may appear, they represent a company that enjoys a near-complete monopoly over every aspect of airline service.

Mid-flight meals? Served by Sky Catering, which is owned by SW Holding.

Taxi service? Run by Airport Gate, also owned by SW Holding.

Technical upkeep of the national carrier's planes and helicopters? Silkway Technics. It -- and multiple other companies controlling everything from traveler assistance to ticket sales to duty-free stores -- are all owned by SW Holding.

The holding company is so expansive it even includes its own Silk Way Bank. According to an investigation by RFE/RL's Azerbaijani Service using documents obtained by the State Committee on Financial Securities, the bank's owners include two women with close ties to the country's leadership. One is Zarifa Hamzayeva, the wife of the president of Azerbaijan's AZAL state airline company. And the other is Arzu Aliyeva, the 21-year-old daughter of the country's president, Ilham Aliyev. (The remaining owner and current majority stakeholder is Silkway Airlines LLC, which is registered abroad.)

Azerbaijani President Ilham Aliyev
The rise of SW Holding, which has seamlessly absorbed many of AZAL's former businesses, has raised questions about dubious privatization practices in Aliyev's Azerbaijan. It also serves to underscore how the political elite continues to use close friends and family members to preserve its hold on the country's most valuable assets -- despite Azerbaijani laws that list nepotism by state officials as an offense punishable by up to 12 years in jail.

The Kids Are Alright

Ilham Aliyev likes to keep things in the family. It's a trend started by his father, Heydar, who ruled the country for 30 years before effectively handing the reins to his son before dying of a heart condition in 2003. Aliyev's wife, Mehriban Aliyeva, is a parliament deputy and a prominent political figure in her own right.

According to a report in "The Washington Post," the couple's preteen son, Heydar, last year became the legal owner of nine luxury mansions in Dubai purchased for some $44 million. Their daughters, Arzu and Leyla, also have Dubai property registered under the names. In total, the children's property holdings are estimated at $75 million.

As president, Aliyev earns an official salary of close to $230,000 a year. But Aliyev, who prior to office served as vice president of SOCAR, Azerbaijan's state oil company, has kept a tight grip on the resources of his oil-rich country, and his holdings are believed to be in the tens of millions of dollars. Neither he nor his wife have declared their net worth, in defiance of Azerbaijani law.

The law also prohibits public officials from owning businesses. Family members, however, face no such restriction. It is unclear where Arzu Aliyeva -- who until now was best known for her role in an Azerbaijani tourism ad aired on CNN -- may have acquired the estimated 6.4 million manats ($7.8 million) she used to acquire her initial stake of 29.08 percent -- or how she would pull together the additional 4.5 million manats that she and Hamzayeva would both need to achieve matching blocking stakes.

WATCH: A promotional video for Azerbaijan features Arzu Aliyeva:



Hamzayeva is the owner of Gazelly, a successful cosmetics business, but experts say it is unlikely her profits are large enough to allow multimillion-dollar bank investments.

In an interview with RFE/RL, presidential press secretary Azer Gasimov confirmed that Arzu Aliyeva was one of the owners of the Silk Way Bank. As an Azerbaijani citizen who had reached the age of majority, Aliyeva was fully within her rights to establish her own business, he said.

Dodgy Privatization

The rise of SW Holding and Silk Way Bank have raised questions about the privatization of AZAL, the state airline company, including its holdings, like AZAL Bank. The privatization process was launched in 2003 under a plan drafted by Azerbaijan's Ministry of Economic Development.

According to state law, the entire process was meant to be conducted by the State Committee on Privatization of State Property. But Gulu Khalilov, the committee's spokesman, told RFE/RL he had no information on who privatized AZAL Bank.

Anar Khanbeyli, a financial expert with Azerbaijan's Turan news agency, says the process was dodgy from the start.

"Normally, the state's share should be privatized through the State Committee on Privatizing State Property. And the privatization of the state's share in the bank was supposed to be conducted by the same committee," Khanbeyli says. "They're supposed to make an announcement, accept bids, announce conditions for participating in the tender, and then announce a winner. None of these procedures was followed. They bypassed them completely when they privatized the state's share."

Million-Dollar Contracts

In the meantime, SW Holding has slowly but steadily acquired nearly all of AZAL's former companies, including the insurance firm AZAL Sigorta, which is now co-owned by SW Holding and the two daughters of Jahangir Asgarov, the president of AZAL and the husband of Zarifa Hamzayeva, the current co-owner of Silk Way Bank.

The logo for Azerbaijan's AZAL state airline
SW Holdings has also been the sole contractor on a number of high-profile AZAL projects, including airport-construction deals in Lankaran, Ganja, and Zagatala worth a total of $150 million.

Neither side is eager to clarify the connection between the two entities. SW Holding referred an RFE/RL request for information to the AZAL press services, which responded that SW Holding was a private company and should be able to answer questions on its own.

Khanbeyli says all the parties supervising the AZAL privatization were negligent, from the privatization committee to the Central Bank, the Tax Ministry, and AZAL itself.

"AZAL was supposed to cry foul when it was deprived of its bank," he says. "I guess they didn't because the shareholders are the AZAL president's wife and the daughter of the president of the country."

This is not the first case where the head of state-run agencies have used close relatives to privatize the most profitable parts of their businesses. RFE/RL has previously reported on ZGAN Holding -- a private company run by Anar Mammadov, the son of Transport Minister Ziya Mammadov -- which was awarded several multimillion-dollar construction contracts with the ministry after a murky bidding process.

Questions have also been raised about Tale and Nijat Heydarov, the sons of Kemaladdin Heydarov, the current minister for emergency situations and the former head of the state customs committee. The Heydarov brothers are the owners of United Enterprises International, a group of companies engaging in everything from caviar sales to the ownership of the Gabala soccer club, which is peppered with foreign players recruited from abroad.

But their father, like Ilham Aliyev, has repeatedly refused to report his net worth, and the source of the Heydarovs' wealth has never been clarified.
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by: Democrat from: US
August 13, 2010 15:27
What can I say? A good shot. Congratulations to the authors of a brilliant journalist investigation.

by: Johann from: USA
August 13, 2010 16:28
Business as usual in the former Soviet Union !!!
In Response

by: Taxpayer from: USA
August 14, 2010 05:26

Yes Johann, we are way more sophisticated in America:

Bush Sr. - former CIA Director = Aliyev Sr. - former Chief of KGB

Bush Jr. - warmonger and loser oilman = Aliyev Jr. - warmonger and loser oilman

by: billy rogers from: mattoon, IL
August 13, 2010 16:48
another post-soviet nepotistic tyranny, sad how the entire region seems to favor that political model.

by: Tsait from: Canada
August 13, 2010 19:19
Once upon a time, in a far far away land there was a Sultan called Aliyev, who loved his people so much so that he allowed them to live.

by: Alex from: US
August 13, 2010 19:24
This is the way is done in Muslim Turkic-Azeri countries, corruption to the fullest. It's a modern day kingdom.
To Johann: You should do research on the rest of the republics of former Soviet Union they have been doing the right things, but not getting any attention for doing right things, only the wrong doings count in this life!

by: Caring Azeri from: Baku
August 14, 2010 05:41
Previuosly, they would hide this information, but now everything is almost made public and there's no denial. I wonder what is the decision behind this 'publicity'.

by: Icek from: Ukraine
August 14, 2010 07:51
@Johann & Billy Rogers

Really? You guys think that this some kind of post-Soviet thing? Look across to the rest of the region (Middle-East), and see how it is run. I'd say that Azerbaijan is blending in perfectly. Then look at "post-Soviet" Georgia (and I'm not even going into the Baltics)--sure it has its problems, but its far from a nepotistic tyranny. Then look at Ukraine: oligarchs sure, nepotistic tyranny--no.
Time to go beyond the superficial
In Response

by: Bart
August 14, 2010 19:27
Georgia's main opposition news station is raided by government troops. Its oligarch owner dies under mysterious circumstances. The station goes on to broadcast an absurd false story implicating members of the government's political opposition. It is a classic post-Soviet love story.

by: Nadeem Khan from: Peshawar Pakistan
August 14, 2010 11:49
It is really a brilliant effort by the RFERL team,and should be appriciated must. But after publishing the report i am worried about the future of those invitigative journalists.The present Ruler of Azerbaijan would never like this effort and will diffinately do something, to teach lesson to those people who tried to show their corruption on international press.As i lived in that country for long time and i am familiar with that state terrorism.The RFERL higher authorities must think about the security of their team and worker in Azerbaijan.
In Response

by: Taxpayer from: USA
August 15, 2010 21:40
Don't be surprised that Pakistanis lived in Azerbaijan as well as Afghan mudjahids. The father of the current president Ilham Aliyev, former KGB general Heidar Aliyev invited 2500 Afghan talibs to join the fight against infidel Armenians in Karabakh. They lost big time, but managed to establish Al-Qaeda in Azerbaijan. Does it surprise anybody that a few years later the order to bomb US embassies in Africa was faxed from Baku, the capital of Azerbaijan?
In Response

by: Nadeem Khan from: Peshawar Pakistan
August 17, 2010 08:41
@Taxpayer.
For your kind information all Pakistanis and Afghani are not terrorists.You dint know that during Soviet invasion in Afghanistan thousands of Pakistani and Afghani students were given a chance to study in the different educational institutions of the former USSR.And i was one of them.I have studied in Russia and Ukraine.Actually the people whom u talked about were brought to Azerbaijan not to fight the Armenia but those people were from that cadre which were promoted by west against soviet union in the name of Jihad and Islam.they were used by the west not only in Azerbaijan , Armenia but as well as in Chechnya,Daghistan, and central Asian states like Tajikistan and Uzbekistan.And the purpose was to controle the resources and to give an end to Soviet power.Those Mujahidin and Arabs were trained by the West and Arabs with allot of financial support.After the decentralization of USSR the west stopped economical support and thus these elements became anti west and specially USA.And till today all the world is terrorized by them and no one knows how to control them.
In Response

by: Bart
August 17, 2010 20:22
I mostly agree, Nadeem, except I do not think the financial support has dried up. The Saudi royals wish to control the Muslim world, and Al Qaeda and other terrorist groups have been so kind to leave their interests alone.

The other thing that bothers me...Brzezinski and neo-conservatives alike still believe that the United States must dominate Eurasia to maintain superpower status. Then they are the ones acting under 19th century British imperial delusions. This is where so many people are crushed.
In Response

by: Taxpayer from: USA
August 17, 2010 22:09
Nadeem Khan - apologies, I didn't mean to imply that all Pakistanis are terrorists. In fact, my former roommate in Soviet Union was a Pakistani communist who escaped the the government persecution, fought in Afghanistan against Mudjahidin and then decided to study in my school after the war was over... He now lives in Russia with his family.
In Response

by: Nadeem Khan from: Peshawar pakistan
August 20, 2010 00:55
@ Taxpayer.You welcome dear.And i am really pleased to know that you had a room mate a Pakistani communist.May be we are familiar to each other.After the decentralization i lived in different states of former USSR but you know the situation became worst for all Pakistanis because of those Jihadi and Alqaeda elements.any way nice to know about you.and feel free to contact and share your views any time with me.Thanks
deemajan@yahoo.com
In Response

by: Al Kyder from: Sth Pacific
August 29, 2010 11:06
Nadeem Khan ; Well I have noticed how the Americans here have deliberately ignored who put Aliyev into power and how and why. Its like they have never heard of 9/11 and the BCCI bank. Funny how their Orwellian dogma produces double think even on radio free Europe. And, after all that media hype over BP in the gulf during their pretend independence day. Yes the British could beat Napoleon but they couldn't handle 2000 barefoot Irish with squirrel guns hold up behind the outdoor furniture from a pub.

If you want to know who is running this show here is a link American Committee for Peace in Chechnya Chaired by former National Security Advisor Zbigniew Brzezinski, former Secretary of State Alexander M. Haig and former Congressman Stephen J. Solarz, the committee is composed of more than one hundred distinguished Americans representing both major political parties and nearly every walk of life. Based at Freedom House,

If your from Pakistan you would know all about Zbigniew Brzezinski. He's creating terrorists again here just as he did in Pakistan and Afghanistan.

The Yankee Taxpayer is just a troll and Radio free europe is just another part of this American propaganda machine.

The recent bombings in the Moscow subway lead all the way back t these people. There doing it again, dont give them a chance this time. They are the ones who export corruption and nepotism Its America's No.1 export

Every country they touch turns to crap. Women end up as prostitutes, and the men end up as unemployed drug addicts. Statistics dont lie. What they are scared of is that the Russians are coming, and they will never get their filthy hand on all that il and gas in the caspian basin. Remember the Enron Dabhol power project in Maharashtra state? The same crooks and liars Nadeem Khan

by: Vakhtang from: Moscow
August 14, 2010 14:12
What about Russia?
Don't remember drunkard Yeltsin with his daughters who stole a lot of money?
So everybody in power will be think about they children.
It were ,it is, it will be in the future.

by: J from: US
August 14, 2010 15:29
I have a question: why do Azerbaijanis have Russian last names ending with "ov" or "ev"? Are they Russian?
In Response

by: Seyran from: A
August 14, 2010 19:10
To J from US:

No, they are not Russian. It is a result of the "russification" people suffered under the last centuries of the Russian Empire, and then the Soviet Union. During the Russian Empire, you know every empire imposes its rules on its people. And as you know, as a "unified 'Soviet' people"we were all "Russians".

The "ov" "ev" endings for man an "ova" "eva" endings for woman are found all around former Soviet Turkic states, however their names are not Russian. "Aliyev" may have a Russified ending but its root is of Turkic/Persian origin. The same is with all Azerbaijani, Kazakhi, last names...their ending is Russified but their root is of Turkic origin.
In Response

by: Seidkazi
August 15, 2010 12:26
Mind you, during perestroika and after independence, a number of people (mostly politicians or intelligentsia, here and there a businessman) 'de-russified' their family names. They either dropped the -ov(a) or -ev(a)' or adopted Turkic or Persian suffixes if they took patronims again (e.g. Ibragimov became Ibragimoglu, Rasidov bevasme Rasizade) or the suffix was simply dropped (e.g. Alibyaev became Alibayli). The same in Kazakhstan and Tajikistan.

There are even two presidents in the ex-USSR who did it: Emomali Rahmon (formely Rahmonov) in Tajikistan and Abülfaz Elçibey (formerly Abülfaz Aliyev) in Azerbaijan (1992-93).

It's certainly not a mass phenomemon though.
In Response

by: Taxpayer from: USA
August 15, 2010 21:58
I would like to add to Seyran's explanation that Aliyev clan is Kurdish, not Turkic. The current president's grandfather was born in the middle of nowhere in Armenian Nakhichevan while his nomadic Kurdish family was following their sheep in the mountains. His grandmother was born in a maternity house in Armenian capital Yerevan. Of course nomadic Kurds didn't have a concept of last names either. Imagine you live all your life around the sheep and the tribes distinguish themselves from each other by the color of the sheep they own - White Sheep tribes fight against Black Sheep tribes. When their tribe members die they ask local Armenian population for a permission to have a graveyard on Armenian lands... Now the Aliyev clan installed ethnic Kurds all around Azerbaijan to run all official affairs and businesses - look around - why the mayor of Gandzak (ancient Armenian city occupied by Turks) has to be a Kurd? Because Aliyev's Kurdish clan does not trust Caucasian Tartars to run any part of the country.
In Response

by: Taxpayer from: USA
August 14, 2010 21:41
Good question J...

See, Azerbaijan is an artificial country created by Turkish army that invaded the area after the Russian Revolution and the Bolsheviks. Turks committed atrocities and ethnic cleansing against the native (mostly Christian) populations of these lands and Bolsheviks continued their "nation-building" mission by grabbing a name of the neighboring Iranian province of Azerbaijan and applying to the lands of Tolysh, Lezgy, Armenian, Tsakhur and other native peoples in order to create a new "Azerbaijani" nation which never existed before. They had to create a whole new history of this land to make people believe that Turkic speaking nomadic tribes previously known as "Caucasian Tartars" were native to this land and had an ancient "Azerbaijani" history connected to this area.

So the nation building began all in the name of carving more land out of Iran someday and supporting pan-Turkic notion of connecting Turkic peoples from occupied Greece and Cyprus all the way to Uigur-populated northern China.

Well, it turned out that Tartars there had no last names... Why would tribal nomadic people with clans fighting with each other need last names? So the Bolsheviks who came from Russia and spoke Russian invented Russian sounding last names for all of them ending with -ev(a), -ov(a), etc. They also made sure that the remaining native populations changed their historic last names to match the nomads and this is how a new nation was created.
In Response

by: Teymur from: Baku
August 16, 2010 05:04
You somehow forgot to note that Azerbaijan's independence was proclaimed by an Azeri political party Musavat well before before the Turkish Army's coming.
Azerbaijan's intelligentsia saw Azerbaijan as a distinct cultural and geographical entity through centuries.

Whatever nomads came in 12-13 centuries, were all settled.
In Response

by: Taxpayer from: USA
August 17, 2010 22:31
Teymur,

Please educate us:

1) tell us exactly what you mean by "well before" - when did the Musavat party issue that proclamation of independence? Year and month?

2) Where was that proclamation issued and why did it happen outside of "Azerbaijan"?

3) Care to share with us any names of the Azerbaijan's intelligencia that "saw Azerbaijan as a distinct cultural and geographic entity through centuries (sic!)" within it's current borders?

4) How did the nomads manage to "settle" the lands that were inhabited by somebody else and why are they continuing to treat these lands like they are still nomads? What happened to the original inhabitants of the lands?
In Response

by: Ali Kyrgyz from: South Korea
August 15, 2010 01:46
The official system of family registration remained from soviet union times.many post soviet countries have their family names ending with ov and ev.it does neccesarily mean you are Russian by ethnicity.
In Response

by: Taxpayer from: USA
August 15, 2010 22:32
Maybe Ali can tell us what last names Kyrgyz and other Turkic nomads used to have before the Russians took over? The truth is that all Turkic peoples came out of Altai mountains and had no last names! They had no concept of an individual human being - everyone was a part of a clan and had no right to have individual will. Their vocabulary had around 800 words, language with a simple grammar understandable to a 4-year old of any background. Even now, after 70 years of authoritarian Soviet rule and close to 20 years of independence they follow an ancient tradition of running over the neighboring tribe's land every Spring to seed their lands. The law of the steppes dictates that whoever managed to seed the land has the right to collect the crops. So, every year the game begins - each tribe runs over each other lands trying to seed as much land as possible killing each other in the process. Mind you, these lands used to belong to ancient civilizations before Turkic tribes moved in - just recently ruins of an ancient Armenian monastery were discovered on the shores of the Issyk Kul lake in what is now "Kyrgyzstan"...
In Response

by: Seidkazi
August 16, 2010 07:37
Nationalist wanking. "Armenians invented the world and the first people on Earth were Adamian and Evanian". Right. As if the pityful state of Armenia today is something to boast about.
In Response

by: Teymur from: Baku
August 16, 2010 12:42
"ruins of an ancient Armenian monastery were discovered on the shores of the Issyk Kul lake in what is now "Kyrgyzstan"...

nad now the time for Issyk Kul Lake )) the same old Armenian Dream of "Hayastan from sea to sea (lake, pond etc.)", huh, Mr. Taxpayer-yan ?
In Response

by: J from: US
August 20, 2010 02:25
I doubt that is the reason. Why don't Estonians have Russian names then? You think they wrote a letter to Moscow asking not to be russified:)
In Response

by: Bald Eagle from: North America
August 15, 2010 02:50
That was done for the purpose of assimilation. When the soviet union was established they changed the last names of azerbaijanis to wipe out their true identity.
In Response

by: Taxpayer from: USA
August 15, 2010 22:53
Tell us, Bald Eagle, what did the Russians change the last names of Azerbaijanis FROM? What kind of last names did they have before? Did they even call themselves "Azerbaijani" at that time?

Well, the truth, and all written sources, tell us that there were no Azerbaijanis before Lenin's Bolsheviks invented such a nation and they had NO LAST NAMES because nomad Turks used the color of their sheep (black or white) to identify their clans.
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