Georgia, known as Sakartvelo in the Georgian language, has turned into “SOCARvelo,” locals sarcastically say. Azerbaijan’s first family reportedly relied on a sophisticated network of “proxies,” from Israeli to Moroccan businessmen, to obscure ownership of their companies.
A taxi driver guiding us through the city of Tbilisi told us that Georgians call their own country
Sakartvelo in Georgia. When he learned we were from Azerbaijan, he pointed to a gas station owned by the State Oil Company of Azerbaijan Republic (SOCAR) and jokingly added that now they call it SOCARvelo.
Georgia, an impoverished South Caucasian country, has become an attractive destination for the oil-rich Azerbaijan. Not only did SOCAR gas stations pop up all over Georgia but SOCAR has also been providing Georgia’s natural gas supply. Additionally, Azerbaijan granted Georgia a low-interest loan of $750 million for the construction of the Baku-Akhalkalaki-Kars railway, a regional rail link project that will connect the South Caucasus with Europe.
Meanwhile, it is Azerbaijani companies that carry out the construction work.
In need of foreign investment, Georgia has drawn the attention of the Azerbaijani first family. The Aliyevs and their affiliated oligarchs have planted extensive business networks in Georgia. They also reportedly invested heavily in the banking and financial, transport, tourism and food sectors in Georgia.
Research shows that the family relied on a sophisticated network "proxies," including Israeli and Moroccan businessmen, in order to obscure ownership of their business dealings in Georgia.
How did SW-INN become Gloria?
Tbilisi Palace is an opulent hotel located in the predominantly Azeri area of Maydan in Tbilisi. The area is home to a monument to the late Azerbaijani President Heydar Aliyev. Local residents claim that Tbilisi Palace belongs to Azerbaijani First Lady Mehriban Aliyeva. This claim forms the basis of this investigation.
According to the National Agency of Public Registry databases operated by the Ministry of Justice, the hotel belongs to a company named Gloria. These records indicate that the hotel previously belonged to a limited liability company named Dzvelli Tbilisi (Old Tbilisi) and located at Gorgasali Street 3, Tbilisi. According to the purchase agreement signed at the Maya Beregvadze notary office in Tbilisi on December 24, 2009, Israeli citizen Akakiy Gorialashvili sold Dzvelli Tbilisi LLC to Azerbaijani national Ilham Asadov, the president of travel agency Silk Way Georgia.
A separate purchase agreement signed on the same and at the same location indicated that Asadov purchased a 373 square meter land and a building of 216 square meters on Akhundov Street 4 (near Tbilisi Dzvelli Hotel).
On February 10th, 2010, Asadov terminated Dzvelli Tbilisi LLC and established a company named SW-INN LLC instead. While perusing the National Agency of Public Registry records managed by the Ministry of Justice, we discovered that the Aliyev family’s business partners hold shares in this company and serve as executive managers.
On February 20, 2010, Asadov transferred SW-INN’s shares to Malahat Jahangir Askerova
(35%), Jamila Jahangir Askerova (35%), and Sanan Zaur Akhundov (30%). Malahat and Jamila are daughters of Azerbaijani Airlines (AZAL) President Jahangir Askerov. They also hold shares in Silk Way Holding, along with Ilham Aliyev’s daughter, Arzu Aliyeva. Meanwhile, Akhundov is also the president of Silk Way Holding and a board member of the State Civil Aviation Administration of the Republic of Azerbaijan.
According to SW-INN’s board meeting records dated May 11, 2011, Akhundov sold his 30% shares to Zarifa Kamil Hamzayeva, who is also a shareholder of Silk Way Holding and Jahangir Askerov’s wife.
On March 1, 2012, Moroccan citizen Jawad Dbila, the director of International Holding Limited Company, was appointed as the new director of SW-INN at SW-INN’s extraordinary meeting.
Dbila is one of the founders of Silk Way Holding, owned by Arzu Aliyeva. He served as SW-INN’s director until December 27, 2013. But his favors from Aliyev did not stop there. On May 31, 2014, Aliyev awarded Dbila the Progress Medal for “services in the field of civil aviation.”
999 square meters for one lari
SW-INN’s assets extend well beyond Tbilisi into the Batumi region. On June 17, 2011, Hamzayeva bought 999 square meters of nonagricultural land on the Khimshiashvili Street in Batumi for a mere one lari (40 cents).
According to the contract signed by Hamzayeva with the Ministry of Finance and Economy of Ajara Autonomous Republic (number 110616368), the land was meant for the construction of a hotel and aimed to provide Georgians with job opportunities. On October 12, 2012, however, the land turned into SW-INN’s property, according to an agreement between Hamzayeva and Dbila signed at Baku’s public notary office no. 7.
SW-INN’s board members held an extraordinary meeting in Baku on June 19, 2013, where they decided to rename the company to Gloria LLC.
They also increased the company’s share capital to 3.3 million laris ($1.4 million). Per this decision, Hamzayeva’s property at K. Gamsakhurdia Street, 810, along with parking lots 5 and 6 were transferred to Gloria LLC’s ownership. The following individuals were named as Gloria’s shareholders:
- Jamila Jahangir Askerova– 24.62%
- Malahat Jahangır Askerova – 24.62%
- Zarifa Kamil Hamzayeva – 57.76%
Gloria LLC is currently occupying Gazelli Hotel building on Khishashvili street in Batumi. The construction is nearing completion. The work is being carried out by the Turkish construction company MPA. Meanwhille, Gloria is reportedly building a beauty salon in Batumi, according to the website of Zema Construction company.
The crisis affected oligarchs too
The financial crisis engulfing Azerbaijan is also affecting the Aliyev family’s entourage, including the oligarchs. Netgazeti.ge reported that construction of sea resort Gloria Hotel has come to a standstill. The Azerbaijani delegation overseeing the construction work explained that the sudden interruption was due to financial difficulties.
"We have done everything we had to, the rest now depends on the owners," a representative of the company told Netgazeti.ge. The article stated that the hotel is now on sale.
Construction companies involved in building the hotel have mysteriously won tenders in Azerbaijan.
Tbilisi Palace restoration and Qazelli Hotel construction were both awarded to the MPA Construction and Trade Council, which is part of the Turkish MNG Group of Companies.
According to the MPA Construction and Trade Council website, restoration of the 46-room Tbilisi Palace hotel cost $5 million, and construction of the four-star 155-room Gazelli Hotel cost $33.5 million
Additionally, MPA Construction and Trade Inc. carried out construction work for hotels owned by AZAL president’s family members and signed contracts worth millions in Azerbaijan.
According to the MPA website, the company has built helicopter, plane and cargo equipment worth a total of $219 million. The construction of foreign flight lines for the airport was estimated at $125 million. The official website of the State Procurement Agency, however, does not contain any information about tenders by Azal.
- Zema Construction Company, which is in charge of completing construction works for Gazelli beauty salon in Batumi, has also been involved in numerous multimillion projects in Azerbaijan. According to the Zeman website, the company was closely involved in construction of the International Airport named after Heydar Aliyev. Furthermore, Zema Construction Company carried out construction works for the Gazelli plant in Azerbaijan owned by Hamzayeva. The company also conducted a number of projects for Krokus company in Russia, owned by the former relative of Ilham Aliyev and his daughter Leyla Aliyeva's father-in-law, Araz Aghalarov. The two companies have also carried out construction works for Gloria in Georgia.