offshore Archives

Turkey’s CHP reveals alleged documents showing Erdogan offshore money transfers

December 2, 2017 by administrator

Erdogan family’s offshore transfers

The spokesperson for Turkey’s main opposition party has claimed that millions flowed between Turkish President Erdogan’s inner circle and an offshore company. Erdogan says the charges are fake.

It has been a challenging week for Turkish President Recep Tayyip Erogan. International attention has been focused on the testimony of Turkish-Iranian gold trader Reza Zarrab in an Iranian sanctions-evasion case allegedly involving former ministers in the president’s government.

Back in Turkey, Erdogan is facing a claim from the country’s main opposition party that it has documents proving that individuals within the president’s inner circle made millions of dollars of offshore bank transactions to a British tax haven.

On Friday, the spokesperson for the Republican People’s Party (CHP), Bulent Tezcan, held a news conference at the Turkish parliament, where he laid out his party’s allegations against Erdogan and his inner circle.

Tezcan showed off documents to the assembled press, saying that they were bank receipts detailing a total of $15 million (€12.6 million) in transactions between Bellway Limited, a company established in August 2011 in the British Crown dependency of the Isle of Man, and Erdogan’s close circle.

The British Isle has low-tax policies and is often described as a tax haven.

The allegedly involved individuals include some of the president’s closest relatives: his son, Ahmet Burak Erdogan; his brother, Mustafa Erdogan; his brother-in-law, Ziya Ulgen; and the father-in-law of Ahmet Burak Erdogan, Osman Ketenci. Erdogan’s former principal clerk Mustafa Gundogan was also allegedly involved.

Tezcan also distributed copies of the supposed original bank and SWIFT receipts to members of the press.

The veracity of the documents has yet to be verified. The CHP did not respond to a request for information from Deutsche Welle.

Company with £1 capital

The first bank-transfer accusations against Erdogan’s family came from CHP head, Kemal Kilicdaroglu, on Tuesday during an address to party members at the parliament.

According to the CHP, the Bellway company was founded with only £1 capital ($1.14, $1.35) by a Turkish citizen named Sidki Ayan and was soon after transferred to another Turkish citizen named Kazim Oztas, still with the same amount of money.

As Tezcan alleged, the company made transactions worth $15 million in the span of only under 20 days around one month after the new owner took over.

Source of the money

While the alleged bank receipts Tezcan showed to the press showed total transaction value, the main question in Turkey revolves around the source of the money and the direction of the money flow.

Kilicdaroglu previously had said that money had been transferred into the Bellway company, but at the conference on Friday, Tezcan asked aloud how the Bellway company could have paid millions of dollars after having begun with capital of just £1.

“Two things come to one’s mind: money laundering or tax evasion,” Tezcan said.

urak Erdogan, Osman Ketenci. Erdogan’s former principal clerk Mustafa Gundogan was also allegedly involved.

Tezcan also distributed copies of the supposed original bank and SWIFT receipts to members of the press.

The veracity of the documents has yet to be verified. The CHP did not respond to a request for information from Deutsche Welle.

Tezcan is the spokesperson for the largest opposition party in the Turkish parliament

Company with £1 capital

The first bank-transfer accusations against Erdogan’s family came from CHP head, Kemal Kilicdaroglu, on Tuesday during an address to party members at the parliament.

As Tezcan alleged, the company made transactions worth $15 million in the span of only under 20 days around one month after the new owner took over.

Source of the money

While the alleged bank receipts Tezcan showed to the press showed total transaction value, the main question in Turkey revolves around the source of the money and the direction of the money flow.

“Two things come to one’s mind: money laundering or tax evasion,” Tezcan said.

Kilicdaroglu first claimed bank transfer proof on earlier this week. Erdogan has called him a liar and denied all claims.

The CHP spokesperson promised to hand over the alleged bank documents to the prosecutor. Ankara’s Chief Public Prosecutor’s Office had launched an investigation into the CHP accusations on Thursday.

The CHP has said that the issue is ethical and not criminal.

Also on Thursday, the Turkish parliament rejected a motion put forth by the CHP calling for the body to further investigate the claims. The CHP is the main opposition party in the Turkish parliament, where Erdogan’s Justice and Development Party (AKP) holds a majority.

‘Not a cent’

Erdogan has denied the CHP’s claims, stating that “not a cent” was sent abroad. He also called on Kilicdaroglu to prove the allegations. Speaking at an event on Thursday, Erdogan said that Kilicdaroglu would “pay the price.”

The president’s lawyer has said that the documents CHP put forth were fake.

Erdogan has said he would resign if the claims were proved true.

Erdogan said that his acquaintances mentioned in CHP’s allegations had sold a company and the money had been wired to them for that purpose. Erdogan did not elaborate on the details of a company owned by the five people or when and how it was sold.

Since the allegations first surfaced, Erdogan and his acquaintances have filed a lawsuit for moral indemnities against Kilicdaroglu worth 1.5 million Turkish lira ($383,000, €322,000).

Mahir Unal, the ruling AKP’s spokesperson, said on Friday, that the issue would further be dealt with in court and not in the parliament.

Source: http://www.dw.com/en/turkeys-chp-reveals-alleged-documents-showing-erdogan-offshore-money-transfers/a-41622223

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Haykakan Zhamanak: More offshore investments in Armenia’s economy

December 3, 2016 by administrator

The past nine months’ biggest investment in Armenia’s economy, about US $170 million, came from Cyprus which is known to be an offshore zone, the paper says, citing official statistics.
“Accommodation arrangement” is reported to be the justification for attracting the money, but the paper says no person or place is mentioned in the document published by the National Statistical Service. The paper claims that the “foreign investments” brought to Armenia in this way are just as an attempt by several Armenian officials and oligarchs yo hide the sources of their income accumulated in offshore companies.
Additionally, it also offers them certain tax privileges, says the paper, adding that another “foreign investment”, amounting to about US $60 million, came from a Luxemburg-based company in the reporting period.

Ukraine: President Poroshenko’s offshore connection in Germany

May 23, 2016 by administrator

Panama City: Poroshenko was one of the people implicated in the ‘Panama papers’ revelations

Resentment is growing in Ukraine about the offshore holdings of the president and his confidantes. A DW investigation sheds new light on the relationship between Poroschenko and shell companies in Germany.

A starch factory seems an odd addition to an Eastern European oligarch’s portfolio. Yet in the case of Ukrainian President Petro Poroshenko, starch is an important ingredient for his chocolate empire; so important that Poroshenko’s group of companies does not buy the ingredient but produces it in their own factories, which include two in Ukraine and one in eastern Germany, according to a DW investigation.

Poroshenko and shell companies

Speculation about Poroshenko as a possible investor in the factory in Germany dates back to 2011, the date it was purchased. With the “Panama Papers” revelations, the complexity of the investments held by Poroshenko and those close to him has become clear: the politician has coordinated the business of his well-known confectionery manufacturing company “Roshen” via offshore holdings. Critics say this was to avoid taxation, but Poroshenko denies those allegations, saying that these offshore companies were created in order to allow them to be managed in escrow for as long as he is president.

An investigation by Deutsche Welle has shown, however, that the use of shell companies in tax havens is not unusual for Poroshenko. One example of that can be found in the starch factory in the city of Elsterau in the eastern German state of Saxony-Anhalt. With revenues of around six million euros and nearly 100 employees, it is just a side project in the larger business empire the Ukrainian president has built.

Goal: stay anonymous

The firm in Elsterau belongs to a limited liability company called “Interstarch GmbH,” which, as DW discovered, is run by Poroshenko’s firm “Interstarch Ukraine.” According to commercial registration records, the German company is formally registered to a corporation in Cyprus, which itself is controlled by a corporation registered in the British Virgin Islands. This web conceals the real ownership and could be used for tax advantages.

A request made by DW to the office of the Ukrainian president for clarification about his relationship to these offshore companies has gone answered. His business adviser has said that the network of companies does not belong to Poroshenko, but instead legally belongs to a man named Sergei Zaitsev, who, according to the adviser is an “independent businessman” and business partner of Poroshenko.

But an inspection of commercial registries in Cyprus and the Netherlands tell a different story. Zaitsev is not only the deputy director general at Poroshenko’s Roshen company but is also the CEO of the shell companies which are said to be handling Roshen in escrow. The “Panama Papers” have thus revealed the Ukrainian president to be the person legally charged with this web of firms that can be traced back to the British Virgin Islands. That is also where the company Euro Business Investments Ltd is registered – a company, which – via Cyprus – is controlled by the German firm Interstarch GmbH.

No registration requirements but tax savings

The British Virgin Islands are one of the most important tax havens in the world, according to Tax Justice Network. There is no public registry of companies and they do not cooperate with foreign tax offices. Is this how Poroshenko’s firms have been organized offshore?

Legally, the Ukrainian president is required to detail any earnings openly. Poroshenko has said that since he took office, he has not had any overseas income. And he couldn’t have, as his old friend Zaitsev is in reality the owner of the factory in Germany via the firm in Cyprus. What remains unclear, however, is who claims ownership at the end of the chain of firms in the British Virgin Islands?

In addition to the anonymity that a shell company offers, these holdings come with the added advantage of reduced taxes. The sale price for the German factory was 35 million euros, which the company Interstarch GmbH received in the form of a loan from its Cypriot parent company, Camarin Limited. The Ukrainian investors had essentially lent themselves the money, and it seems they did so at a high interest rate, according to the annual balance sheet. Since 2011, nearly two million euros in interest have been paid out to the Cypriot firm annually.

Such interest payments are not taxed due to a double-taxation agreement between Germany and Cyprus, a legitimate method for saving on taxes according to financial expert Hans-Lothar Merten.

“The interest payments can be claimed here as an expense which reduces profits in Germany. Then the profits that flow further through to Cyprus and the Caribbean are tax-free,” said the expert. In his best-selling book, “Steueroasen” (Tax Havens), Merten writes about such loopholes. Large German companies also take advantage of such opportunities, said the publicist and banker.

More millions said to flow

Year after year, Interstarch has piled new debt onto its Cypriot parent company. By the end of 2014, that amounted to 44 million euros. Yet during a visit by Hartmut Möllring, the economics minister of Saxony-Anhalt, the head of management at Interstarch announced a further investment in the company totalling 25 million euros.

The company complained in their annual report that prices for starch are too low and prices for wheat too high. That resulted in a loss in 2014 amounting to nearly six million euros. But, at the same time, the production capacity there will be expanded over the next five years. The Ukrainian investors are apparently loaning themselves money in Germany, for which more interest payments will be made that will need to flow into the accounts of the offshore firms. The German tax authorities with therefore come away empty-handed: without profits there are also no corporate taxes.

London law firm helped Azerbaijan’s first family set up secret offshore firm

April 6, 2016 by administrator

The daughters of Azerbaijan’s president have a secret offshore company in the British Virgin Islands that was set up last year to help manage their multimillion-pound property portfolio in Britain, The Guardian reports.

Leyla and Arzu Aliyeva – who have cultivated high profiles inside and outside their home country – are shareholders in Exaltation Limited, leaked documents reveal. The company was incorporated in April 2015 with the purpose of “holding UK property”. The London law firm that set it up, Child & Child, claimed – wrongly – that the two women had no political connections.

The business interests and property portfolios of President Ilham Aliyev and his family have been the subject of extensive reporting in recent years.

These fresh revelations come amid growing concern in government that house price inflation – particularly in London – is being fuelled by rich foreign investors, who are now estimated to own more than £170bn of UK property.

Three years ago, David Cameron launched a campaign to demand more transparency about the ownership of offshore vehicles.

The network of companies used by Azerbaijan’s ruling family and their associates are set out in the Panama Papers, a leak of the database of the offshore law firm Mossack Fonseca obtained by the German newspaper Süddeutsche Zeitung. It was shared by the International Consortium of Investigative Journalists in Washington with the Guardian, the BBC and other media around the world.

President Aliyev has ruled the country since 2003. During this time his daughters have reportedly amassed vast personal business empires. They own luxury apartments in the UAE, as well as interests in telecoms and gold mining.

It was already known that Leyla Aliyeva owned a £17m mansion on Hampstead Lane in north London, next door to Kenwood House and overlooking Hampstead Heath. She is an artist and socialite, with friends said to include Prince Andrew, Lord Mandelson and Elisabeth Murdoch.

The papers show that she set up a new offshore firm at the time of her 2015 divorce from Emin Agalarov, an ethnic Azerbaijani businessman and pop star. The couple lived in Moscow and also reportedly owned a luxury penthouse overlooking Hyde Park. Aliyeva, 30, is said to prefer Britain to Russia.

Under the British government rules, Leyla and Arzu Aliyeva are classified as “PEPs” – politically exposed persons. The term encompasses anybody with links to top political leaders, including family members and close associates. It is not illegal for people classified as PEPs to own offshore businesses, but those companies are supposed to be subject to greater scrutiny and due diligence checks by banks.

However, it appears that Child & Child, the firm of London solicitors that acted on behalf of Aliyev’s daughters, did not declare their high-profile status. Asked on company formation documents in January 2015 if the two women were PEPs, Child & Child ticked “no” rather than “yes”.

It is not clear whether their status as PEPs was overlooked. The Guardian repeatedly asked Child & Child to comment but it declined to do so.

Child & Child, whose Knightsbridge office overlooks the gardens of Buckingham Palace, bought Exaltation Ltd on behalf of the Aliyev daughters from the Jersey branch of the Panamanian law firm Mossack Fonseca.

Child & Child requested nominee directors for the new company, at the cost of $550 each.

The total value of Exaltation Ltd’s assets is unclear, but is put in documents at “over $1m”. The money is said to come from “personal savings”.

ICIJ: Azerbaijan president has offshore gold mining companies

April 4, 2016 by administrator

Визит президента Азербайджана Ильхама Алиева в Германию

The International Consortium of Investigative Journalists (ICIJ) reporters have found out that Azerbaijan President Ilham Aliyev has offshore companies to conceal his shares in gold mining and London real estate.

Accordingly, relatives of the Azerbaijani president have used foundations and companies registered in Panama to hide his shares in gold mining companies and real estate market. This is said in an ICIJ press release, according to RBC news agency of Russia.

ICIJ has obtained the documents of Panama-based Mossack Fonseca law firm, which is suspected of establishing fake firms and corporate organizations to conceal asset owners. Even though the press release does not specify the makeup of the Aliyev family property, the Azerbaijani president was already at the ICIJ focus three years ago. At the time, the journalists had found out that he and his family have secret offshore companies.

According to the documents which are under the ICIJ disposal, in 2003, Aliyev and his wife, Mehriban Aliyeva, had purchased a company in the British Virgin Islands. Aliyev, who was noted as the director and co-owner of this company, was an MP at the time, but he became President of Azerbaijan in October of the same year. According to the ICIJ data, this company had a legitimate legal status until May 2004. In actual fact, Aliyev was violating the Azerbaijani law which prohibits the members of parliament and the president from engaging in business activities, the attorneys explained.

In 2008, according to the ICIJ data, Aliyev’s daughters, 19-year-old Arzu and 23-year-old Leyla, purchased Arbor Investments, LaBelleza Holdings Limited, and Harvard Management Limited companies likewise in the British Virgin Islands. The first company was “registered” under Arzu’s name, and the rest—Leyla’s. The respective business transaction was concluded two months after Aliyev’s reelection as President.

At the time, the ICIJ could not find out the type of activity of these companies, but it had noted that, apparently, the Azerbaijani leadership had made considerable efforts to hide these companies from the public.

The ICIJ had informed that the head of all these three companies is Azerbaijani entrepreneur Hassan Gozal. According to the ICIJ data, Gozal, together with his brother Abdolbari, had at least ten companies in Intersun Holding, where Abdolbari was president and Hassan—vice president. According to the documents which are under the ICIJ disposal, Intersun had received several major contracts from Azerbaijan’s state-owned oil company, where Aliyev was first vice president before becoming President of Azerbaijan. In addition, the Gozal brothers’ companies had won state construction contracts in and around Azerbaijani capital city Baku, and totaling some $4.5 billion.