Tuesday, August 30, 2016


Azerbaijani Government Awarded Gold-Field Rights To President's Family

Production is expected to begin at the Chovdar gold field in western Azerbaijan later this year. It contains reserves of 44 tons of gold and 164 tons of silver, worth about $2.5 billion at current prices.
Production is expected to begin at the Chovdar gold field in western Azerbaijan later this year. It contains reserves of 44 tons of gold and 164 tons of silver, worth about $2.5 billion at current prices.
By Nushabe Fatullayeva and Khadija Ismayilova
BAKU -- Novruz Allahverdiyev, 40, lives in a mud house in the village of Chovdar, a small mining town in the mountainous region near the border with Armenia. He is one of 800,000 internally displaced persons from the war with Armenia that battered his native Nagorno-Karabakh region in the early 1990s.

Allahverdiyev and members of 60 other displaced families found shelter and a place to farm in the mountains around Chovdar. Like many in his predicament, Allahverdiyev is patriotic, and the walls of his poor home are plastered with pages from an aging calendar featuring portraits of President Ilham Aliyev and his late father, former President Heydar Aliyev.

Allahverdiyev's family now faces yet another problem. A British mining company has taken over some of his land and has blocked one of the two streams his village relies on for water. Allahverdiyev is sure President Aliyev will help him and his community.

But his faith may be misplaced. What Allahverdiyev doesn't know is that the president and his family own a stake in the new mine. The U.K. company is actually a front for the first family.

In two 2007 decrees, the state assigned the right to develop the Chovdar gold field and five other sites to a company called Azerbaijan International Mineral Resources Operating Company, Ltd. (AIMROC). AIMROC -- which controls a 70 percent stake in the mines, while the Azerbaijan government controls 30 percent -- has been building the infrastructure for the Chovdar mine and is expected to begin production this year.

Panamanian Trail

But sorting out AIMROC's structure is a daunting task. While Chovdar locals blame the "ingilis" (English) for their woes, the truth is quite different. AIMROC is a joint venture of four companies: Londex Resources, S.A, Willy and Meyris S.A., Fargate Mining Corporation, and Globex International LLP. All four are shell companies that, according to Azerbaijani officials, were set up specifically for this deal. It is unclear if any of them have any mining experience or other mining projects.

Graphic: Azerbaijani President Ilham Aliyev's family stake in the gold fields (click to enlarge).Graphic: Azerbaijani President Ilham Aliyev's family stake in the gold fields (click to enlarge).
Graphic: Azerbaijani President Ilham Aliyev's family stake in the gold fields (click to enlarge).
Graphic: Azerbaijani President Ilham Aliyev's family stake in the gold fields (click to enlarge).
A fifth company -- Mitsui Mineral Development Engineering Co Ltd (MINDECO), a mining-engineering company owned by Japan's Mitsui Mining and Smelting Company -- is listed as the official project supervisor, but has no ownership.

Of the four AIMROC owners, the only U.K.-based company is Globex International, which has an 11 percent stake, worth about $200 million. But Globex is actually owned by three companies registered in Panama: Hising Management SA, Lynden Management Group, Inc., and Arblos Management Corporation. According to Panamanian registration records, all three firms list President Aliyev's two daughters -- Leyla and Arzu Aliyeva -- and Swiss businessman Olivier Mestelan as senior managers.

Mestelan has long had close ties to the Aliyev family. He has organized artistic events with them and, together with Leyla and Arzu, appears in the records of other Panamanian companies being used as fronts for businesses in Azerbaijan, including the Azerfon cellular-services provider.  Mestelan declined to be interviewed for this story.

Aliyev's office refused to answer questions about his family's business interests in the gold fields. Presidential spokesman Azer Gasimov did not return phone calls and did not respond to questions submitted in writing.

Opaque Decisions

AIMROC has been controversial from its beginning. The consortium was formed by a 2006 presidential decree that identified Globex as part of the consortium. In 2007, AIMROC was awarded 30-year leases on the mineral fields.

Chovdar alone is a lucrative parcel. According to the Azerbaijani Environment Ministry, it contains reserves of 44 tons of gold and 164 tons of silver, worth about $2.5 billion at current prices.

The contracts were awarded to AIMROC hastily and over the objections expressed by many members of parliament during hearings held in June 2007. Lawmakers complained that the consortium's ownership was opaque; that the contract was awarded in violation of bidding procedures; that none of the companies had any history of mining; and that the deal was contrary to Azerbaijan's national interests.

Ilham Aliyev's daughters, Arzu (left) and Leyla, are listed as senior managers at the Panamanian-registered companies.Ilham Aliyev's daughters, Arzu (left) and Leyla, are listed as senior managers at the Panamanian-registered companies.
Ilham Aliyev's daughters, Arzu (left) and Leyla, are listed as senior managers at the Panamanian-registered companies.
Ilham Aliyev's daughters, Arzu (left) and Leyla, are listed as senior managers at the Panamanian-registered companies.
During the hearings, deputy Valeh Aleskerov, chairman of the parliamentary Natural Resources Committee, defended the deal. He said the creation of offshore companies was "a common practice around the world" and that no tender was issued because of the uncertainty about how much mineral wealth there was. Instead, he said, the government held talks directly with potential investors.

The Environment Ministry's chief geologist, Agamahmud Samedov, told RFE/RL that the estimates of the other five fields are classified. He also declined to comment on AIMROC's ownership or its lack of mining experience.

When asked last month about AIMROC's ownership, Aleskerov said, "Do you think the Azerbaijani government would contract with someone unknown, with just anyone from the street?" When asked if the Aliyev family has any financial interest in the project, Aleskerov said only "Shame on you!" and hung up.

Professional Proxies

Parsing the rest of AIMROC's structure is more difficult. Londex Resources and Fargate Mining are registered in Panama, according to documents obtained from the Panama Registry of Companies.

The documents indicate that the companies are interrelated through a complicated chain of company directorships. All three are or were at one time owned by two companies registered at the same address on the tiny Caribbean island of Nevis: Casal Management and Tagiva Management.

Casal and Tagiva act or acted as the director for at least 20 companies in the United Kingdom, the United States, and Panama. It is likely that the companies are professional proxies used to hide actual ownership.

According to a document of the Tax Registry of Azerbaijan, Willy and Meyris S.A. (listed in some documents as Will & Meyris S.A.) is represented by a Czech geologist, Mirko Vanecek, the executive editor of "The Journal of Geosciences" in Prague.

'The President Is A Good Person'

Meanwhile, back in Chovdar, locals are looking forward to a rumored visit by President Aliyev to mark the opening of an ore refinery the consortium has built.

"We have heard that president will come to the opening ceremony of this factory," villager Paneh Huseynov says. "Please tell our president to come and visit us. Tell him we support his policies. We will not be allowed to approach him. Please, we ask him to come and ask about our living conditions. Then he'll see how we live and how we suffer."

Novruz Allahverdiyev is sure the president will help him.Novruz Allahverdiyev is sure the president will help him.
Novruz Allahverdiyev is sure the president will help him.
Novruz Allahverdiyev is sure the president will help him.
Villagers had no idea that the president's family owns part of the mine operator. "How can the president be benefiting from this production? ... All of the companies here are foreign. Englishmen are running the business here," says one local who refuses to give his name.

Teacher Nureddin Ramazanov lost some land to AIMROC. With a salary of just $130 per month, Ramazanov says his family is starving.

"The company destroyed our road," he says. "Geologists took our land. They paid us only 2,000 manats [$2,500] per hectare.… Now I don't know how we'll survive."

Meanwhile, Karabakh exile Allahverdiyev says he is hoping to get a job at the mine. Locals say mining jobs pay the equivalent of $12 a day. So far, the mining site has hired very few locals.

Despite grinding poverty and the problems with the mine, most locals remain firm in their faith in Aliyev, whose omnipresent portrait gazes out over the people of Chovdar from the walls of shops and schools.

"The president knows nothing about this," says teacher Ramazanov. "Local officials say the president ordered that our land be taken, but I don't believe it. He is a good person."

This report was produced by the Organized Crime and Corruption Reporting Project (OCCRP) in cooperation with RFE/RL's Azerbaijani Service. OCCRP project coordinator Paul Cristian Radu contributed from Bucharest, and RFE/RL correspondent Robert Coalson contributed from Prague
This forum has been closed.
Comment Sorting
by: J.Sims from: NYC
May 03, 2012 20:02
Aliyev's clan treats the whole country as their private bank and the people of Azerbaijan are either too stupid or too scared to do anything about it. It's a shame that the international community continues to do business with these thugs and thieves.
In Response

by: Mani from: Mytown
May 04, 2012 03:59
Instead of looking for war with Armenia, Azerbaijan and its people have to get rid of their own dictator and main robber of their country. Their main enemy are the one's ruling over them, not Karabagh Armenians or Iranians.
In Response

by: Sınav from: South Azerbaijan
May 04, 2012 09:35
The corruption in the government doesn’t mean that Karabakh should not be liberated or it does not mean that Azerbaijani people who are residing in Iran and are deprived of all their rights will not fight for their independence.
In Response

by: Rogi from: NY
May 04, 2012 10:08
Same can be said about Armenia. Armenian people should get rid of the Karabakh-clan, funny how no real Armenian has ruled Armenia in past decade.
In Response

by: Sam from: USA
May 05, 2012 02:40
Karabagh is already liberated; do not worry about it. Others are your problems.

by: Muhammad Naeem Ul Fateh from: London
May 04, 2012 08:06
If first family is involving they should remember what had happened to the president of Egypt and Others. Isn't enough to become a ruler of the country? All leaders should know that there is no indespenseable to lead the country or world.

Muhammad Naeem Ul Fateh,PhD

by: Camel Anaturk from: Kurdistan
May 04, 2012 14:32
More bloody ungrateful comments from people who should know better:Ali Baba ilham is not a good man-he is just the best-problem is he has forgotten the pass word for the Sesame cave and badly needs some gold to buy himself a new electric cattle prod as the old one was stolen by armenian terrorists and all the donkeys from his cattle ran away to Armenia.And Dear Rogi from NewYork-upon-Baki,you are bloody right-Armenia today is ruled by Artsakh Clans,just as azerbaybaydjan is ruled by kurdish kgb clans for the last 80 years-first by haidar alievich allahtan-the azei stalin and then by his most demockraticaly appointed heir Sultan Ali Baba allahtan ilhan junior May.Allah bless you all and give you all the gold and zan zar zamin you can steal and more!!!

by: Fred Flintstone from: USA
May 04, 2012 18:21
Though certainly as corrupt as the father, the Aliyev daughters are smokin' hot! How can a man as ugly as Ilham Aliyev father such stunning daughters? Do the girls resemble only their mother? Did money buy beauty in this case? Is it all the work of plastic surgery?
In Response

by: Camel Anaturk from: Kurdistan
May 05, 2012 00:00
Aaah,Freddie,they say ilham is their father and you buy that???Well.man you are really from the stone age-ilham cannot father a donkey and these girls are from his child bride harem-that`s why everybody loves azeristan so much,but I hope good old Matt will do something on that matter when he becomes president next year.
In Response

by: David from: Minsk
May 05, 2012 06:19
Fred: yes, yes, and mostly.

It is always humorous to me that when a real issue comes up to be discussed, people jump in about the bloodythirsty armenians (this is in response to camel ataturk). Yes, the Armenians did it all. And no, the azeri's will fight for nothing, as a people they are cowards and fools...brainwashed and scared by the thugs that lead them.

by: Anti-Nazi-Turkey soldier from: Far from Nazi-Turkey
May 05, 2012 02:13
Excuse me.. Nazi-Azerbaijan?? or Nazi-Aliyevistan??. I think the last suits totally.

by: Highlander from: Daghestan
May 07, 2012 05:14
Blonde one is beatiful, how i can marry with her ? i need gold, and a tyrant relative :) You Azeris, you are ugly so you can not marry with Aliyev's daughters. Look here, Daghestan, we are handsome, and we need gold, women, oil... Holy Ali Baba, ask us for this. :)

by: www.maragha.org from: Free Artsakh
May 08, 2012 04:04
The current residents of this historic Armenian village of Chovdar (original Armenian name is Yeznaratsants) are nomadic Azeri-Turks who moved into Armenian homes when the native Armenian population of this area was deported in November 1988.

The interviews were taped with the ruins of an Armenian cathedral in the background that the Azeri Turkic nomads have not destroyed yet as they did to most of the Armenian historical sites on the occupied lands. These nomads are temporary there and they know this. This is why they don't take care of "their" homes and streets and the fertile lands.

by: nargis from: qarabaq torpaqindan
May 18, 2012 10:24
Everything seems easy to look at from a distance! will be, will be everything you want, but wait a little! sure that, leader through the efforts of Mr. Ilham Aliyev, who will return to our lands back!

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