Azerbaijani First Family Big On Banking

US, OCCRP (Organized Crime and Corruption Reporting Project) logo

Organized Crime and Corruption Reporting released its second investigation in the framework of "Khadija Project".

The story looks at the onwnership structure of eight banks with links to the family.

"As of Feb. 1, there were 2.3 million people who had bank loans, a sharp increase of 17.7 percent in one year, as many struggle to cover sharply rising living expenses.

Borrowing this money is not cheap: interest rates on consumer loans in 2014 averaged 18 percent, three times higher than in the European Union.

But while the people increasingly struggle, one family is benefiting from the misery: the family of President Ilham Aliyev. According to records collected by the Organized Crime and Corruption Reporting Project (OCCRP), members of the Aliyev family and their close advisors are significant shareholders in at least eight major Azerbaijan banks. They control assets in those institutions worth more than US$ 3 billion."

While there are no bank shares in the name of the president, there are plenty linked to the three children - Arzu, Leyla and Heydar Aliyev writes the article. But it is not just the immediate family whose names are linked to the banks. "President Aliyev's father-in-law, Arif Pashayev, controls Pasha Holding, a conglomerate with interests in banking, as well as construction, insurance, travel and investments, according to an Ernst and Young audit".

"On that date, these eight private banks held 19 percent of the country's banking assets. Three of these banks (Capital Bank, Xalq Bank and Pasha Bank) were ranked in the top four in assets held by private banks. The majority state-owned International Bank of Azerbaijan held 38 percent of bank assets.) There are 45 banks currently doing business in Azerbaijan.

Since Ilham Aliyev became president in 2003, his family members' personal financial stake in many of Azerbaijan's leading economic sectors has grown. The children's ties to the banking sector are just the latest to come to light.

According to corporate records, Ata Holding is 75 percent owned by companies that list daughter Leyla, age 29, and Arzu, age 26, as officers -- and the "ultimate controller of (Ata Holding)" as Heydar Aliyev, the 18-year-old son of the president. Ata Holding, in turn, holds shares in two banks.

These bank records extend through Dec. 31, 2013. OCCRP is not yet able to collect all 2014 records, but at least three of these banks saw their assets grow rapidly in 2014 -- Pasha Bank by 40 percent, Atabank by 56 percent and Xalq Bank by 31 percent."

OCCRP story details the names of the eight banks and the shares as well as connections to the family. These are Atabank, Bank VTB, Pasha Bank, Kapital Bank, Xalq Bank, Silk Way Bank, Expressbank, and Azerbaijan Industrial Bank.

In addition, there are five more banks the article mentions that are linked to some of the government officials, their family members and close associates of President Ilham Aliyev.

Khadija Ismayil was arrested December 5. She worked closely with OCCRP team investigating companies related to the president and his family. Following her arrest, OCCRP launched "Khadija Project" - following up on the work Ismayil started, a group of international investigative journalists continues her work.