Back
Register for SMS Alerts
or enter your details manually below...
First Name:
Last Name:
Email:
Password:
Hometown:
Birthday:
Sorry, we couldn't find that email.
Existing users
Email
Password
Sorry, we couldn't find those details.
Enter Email
Sorry, we couldn't find that email.

Azerbaijani Laundromat includes two Malta firms

Over €440,000 passed through Malta firms for UK shell company employed in Azerbaijani slush fund

matthew_vella
Matthew Vella
13 September 2017, 8:00am
Azerbaijani ruler Ilham Aliyev and his wife Merhiban: the family dynasty has held power since the fall of Communism. The Azeri slush fund uses UK shell companies to then pay off bribes to European politicians, like Italian MP Luca Volonte (left)
Azerbaijani ruler Ilham Aliyev and his wife Merhiban: the family dynasty has held power since the fall of Communism. The Azeri slush fund uses UK shell companies to then pay off bribes to European politicians, like Italian MP Luca Volonte (left)
Malta-registered companies have been featured in the extensive global network through which money from an Azerbaijan slush fund passed.

The data features in revelations published by the OCCRP (Organised Crime and Corruption Reporting Project) into the so called ‘Azerbaijani Laundromat’, a complex money-laundering operation that handled €2.5 billion over a two-year period through four shell companies registered in the UK.

From 2012 to 2014, the money was used by the country’s ruling elite to pay off European politicians, buy luxury goods, launder money, and otherwise benefit themselves.

During the same time period, the Malta company Vostok Media Exchange Ltd was used to process a total of €438,000 in nine separate payments to an English company, Metastar Invest LLP; while Metastar paid another Maltese company, Wise Holding Ltd, €9,510.

Vostok Media Exchange was set up in Malta in 2009, and its ownership is vested in PGM Group SA, which is registered in the tax haven of the British Virgin Islands. Its directorship is held by the Swiss fiduciary services firm Comatrans.

On its part, Wise Holding’s ownership is vested in a Polish firm while its directorship is held by Polish residents in Malta with similar other directorships in Malta-registered firms.

There is so far no information as to what the payments were for.

USDPAYER BENEFICIARY DATE
 
113,447VOSTOK MEDIA EXCHANGE LTDMTMETASTAR INVEST LLPGB2014-05-27
105,720VOSTOK MEDIA ECHANGE LTDMTMETASTAR INVEST LLPGB2014-02-06
72,848VOSTOK MEDIA EXCHANGE LTDMTMETASTAR INVEST LLPGB2013-09-10
69,457VOSTOK MEDIA EXCHANGE LTDMTMETASTAR INVEST LLPGB2013-11-14
57,726VOSTOK MEDIA EXCHANGE LTDMTMETASTAR INVEST LLPGB2013-07-05
31,613VOSTOK MEDIA ECHANGE LTDMTMETASTAR INVEST LLPGB2013-01-25
27,540VOSTOK MEDIA ECHANGE LTDMTMETASTAR INVEST LLPGB2013-01-23
25,846VOSTOK MEDIA EXCHANGE LTDMTMETASTAR INVEST LLPGB2013-05-31
21,233VOSTOK MEDIA ECHANGE LTDMTMETASTAR INVEST LLPGB2012-10-15
11,391METASTAR INVEST LLPGBWISE HOLDING LIMITEDMT2013-08-23
 

According to the investigation by the OCCRP and newspapers such as The Guardian, the money laundering network used four UK shell companies, one of which was Metastar Invest. Its HQ was registered at a service address in Birmingham but ultimately controlled by a company in a tax haven.

Records show that the now dissolved Metastar was run by two “members”: Advance Developments Ltd and Corporate Solutions Ltd, also dissolved and based in Belize.

In turn Metastar controlled other companies, such as Armut, which is alleged to have siphoned €192 million of funds paid by the hedge fund Hermitage Capital Management to the Russian treasury. This particular scandal involved an organised Russian criminal syndicate, the Klyuev Group, which, it is claimed, has stolen at least $800m from the Russian people with the aid of the Russian government.

Sergei Magnitsky, a lawyer working for Hermitage, blew the whistle on the scandal – only to be imprisoned in Russia, and allegedly tortured in a bid to withdraw his testimony. While in prison he developed gallstones, pancreatitis and a blocked gall bladder. A human rights council set up by the Kremlin found that he was physically assaulted shortly before his death, which was the direct result of being denied urgent medical care needed to treat his conditions.

The scandal has only reinforced the perception of corruption at the heart of gas-rich Baku, where the Aliyev dynasty has held sway since the fall of communism.

In a more recent case, an Italian MP was found to have taken bribes to issue favourable reports on Azerbaijan at the Council of Europe. Italian prosecutors accused Luca Volontè, the former chair of the centre-right group in the Council of Europe’s parliamentary assembly, of accepting millions of euros in cash from Azerbaijan in exchange for supporting its government, which has been heavily criticised for subverting elections and jailing journalists and opponents. 

Azerbaijan is often accused of “caviar diplomacy”, using cash and gifts to buy influence – charges first detailed by the European Stability Initiative think-tank in 2012. The council notably voted down a critical report on Azerbaijan’s political prisoners in 2013.

Former Labour MP Joe Debono Grech, a member of the Council of Europe’s parliamentary assembly who was a rapporteur on various reports on Azerbaijan, had denied ever receiving gifts from Baku.

He also had told this newspaper that a speech at a 2015 CoE assembly was misinterpreted. “I do not condone dictatorships,” Debono Grech had told MaltaToday, adding that Azerbaijan is “not a democracy”.

But he was adamant that Azerbaijan could not be turned into another Libya.

While admitting that “nobody approves of unwarranted arrests,” Debono Grech described the situation as “complex” and echoed Azerbaijan’s arguments that there is no clear definition of what constitutes a political prisoner.

Way back in 2012, a report by the South East Europe think-tank, European Stability Initiative (ESI), had already included Debono Grech among the list of Azerbaijani apologists, for failing to flag irregularities in the 2010 and 2013 elections in which Ilham Aliyev consolidated his grip on power.

Debono Grech, who served as co-rapporteur for six years, during which he visited Azerbaijan some 30 times, denied ever receiving gifts from the Caucasian dictatorship.

“I can only vouch for myself, but I never received any gifts,” Debono Grech said, who even as consultant to the Gozo minister had refused any remuneration for his role.

matthew_vella
Matthew Vella is executive editor at MaltaToday.
DealToday
enter to win