Malta firm is node in Azerbaijani dynasty’s grip on telecoms industry

A Maltese company has featured as one of the vehicles being used in a network of holding companies, to house the financial interests of Azerbaijani president Ilham Aliyev’s two daughters in the country’s largest mobile phone business, Azercell.

FA Invest Malta Limited, located in Birkirkara, was created in October 2011 to take over a 6.5% shareholding from a shareholding company of Azercell. Its directors include the Panamanian firm Stella International Services SA, but the company is fully owned by the Malta-based Trident Trust Company, which hides the true ownership of the firm

An exposé by journalist Khadija Ismailova, for the not-for-profit Organized Crime and Corruption Reporting Project (OCCRP), illustrated the far reach of Aliyev’s daughters Leyla and Arzu Aliyeva, in the Azerbaijani telecoms industry – with major shareholdings in both Azerfon, the country’s third-biggest company, and offshore registrations in Azercell, the largest company.

The OCCRP report claims that FA Invest took over the shareholding of one of Azercell’s parent companies, and that a major in the Special State Guard Service – Hamzayev Rashad Firidunoglu – was appointed to represent FA Invest Malta at board meetings of Azercell’s parent company, Azertel.

According to documents for the incorporation of FA Invest Malta, the company became a 6.5% shareholder in Turkish company Azertel, the parent company of Azerbaijani mobile phone provider Azercell after buying out a Turkish shareholder in Azertel. The OCCRP claims a major in the Special State Guard Service was appointed to represent FA Invest at Azertel board meetings.

Linking Azercell to the Aliyev sisters is the fact that FA Invest purchased the 6.5% shareholding that Turkish company Cenay Inshaat held in Azercell; and that two Panamanian companies connected to the Aliyevas also purchased another Azercell shareholder, Cenay Iletishim.

The two Panamanian companies, Dilsan Investments and Colville Group, have the same signatory – financier Olivier Mestelan – as do three other Panamian companies which hold the Aliyevas’ 72% holding in Azerfon.

“That means two out of the top three companies are closely connected to the Aliyev family… the proven paper trail links the family to nearly three-quarters of the mobile market, a commercial dominance that raises serious questions about Internet surveillance and communications security within Azerbaijan,” the OCCRP report stated.

Leyla and Arzu Aliyeva alternate in the role of either president or treasurer of three Panamanian companies, for which Olivier Mestelan acts as secretary. Mestelan also signed the incorporation documents of two other Panamanian companies – Dilsan Investments and Colville Group – which bought a 10.1% share of Azercell in 2005.

Azercell was created in 1996, as a joint venture between the government and Turkish company Azertel.

In 2005, Dilsan-Colville also bought out Azercell shareholder Cenay Iletishim, a Turkish company, for US$6.6 million.

Azerfon – controlled by the Aliyev sisters – had held the 3G monopoly until the end of 2011, while Azercell spent six years trying to get its own 3G licence. When it finally got its 3G licence, FA Invest Malta took over the 6.5% shareholding held by another Turkish company, Cenay Inshaat.

The OCCRP report has illustrated the use of Malta’s financial services as a hub for company structures that hide beneficial owners, or to pass on revenues to companies in low-tax regimes. In the past, names such as Nando’s, Dyson, and the Commonwealth Bank of Australia made extensive use of Malta to benefit from tax rebates of up to 85%.

Malta also has an important relationship with the Azerbaijani government through its upcoming gas plant that will use liquefied natural gas provided by state company SOCAR.

Leyla Aliyev herself brought to Malta a children’s photography exhibition on behalf of the Heydar Aliyev Foundation, where she was toasted by President George Abela.