Azerbaijan's Czech Enclave?

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Azerbaijan's Czech Enclave?

By Pavla Holcova, Khadija Ismayilova and Jaromir Hason

Reporting - 11/10/2012
At Heydar Aliyev Airport in Baku, you can always count on the business class checkin line at the Azerbaijan Airlines Prague flight being just as long as the one for economy class.
That's because Azerbaijan's ruling clique have made the Czech Republic a

favored destination in recent years.

They have come not just as high-end tourists to see its rich historical

sites and natural beauty - but as investors as well. Officials of oil-rich

Azerbaijan, including members of the Aliyev ruling family, have established

companies in Prague, bought land, and built hotels and luxury villas most

of them focused around in the famous spa city of Karlovy Vary (Carlsbad).
The problem is that some of these investments are illegal.
The full extent of their investment became clear after reporters for the

Organized Crime and Corruption Reporting Project (OCCRP) examined the Czech

property and company records of prominent Azeris. The political elite, it

appears, has been playing a real life game of Monopoly in a race to acquire

properties in the heart of the European Union.
There is a historic precedent to the Azeri's love of Karlovy Vary, famous

for its natural springs, resorts, and high-quality glass. The picturesque

town close to the German border in the western part of the Czech Republic

has been an exclusive hideaway for the Russian ruling clique since 1711

when Czar Peter the Great came for treatment in its healing waters. Powerful and wealthy Russians continue to rest and mend amidst its expensive golf courses and spectacular spa colonnades. Most services, especially the high end ones, are offered in the Russian language. The local Czech hockey team at one point considered joining Russia's national hockey league, and for most Czechs, Karlovy Vary signifies close and friendly ties with Russia.
A Family Affair
"Azeris know Karlovy Vary well," said Jan Hornik, a Czech Senator. "Their

[Azeri] Prime Minister told me once his trips to the town were more

business than leisure because he met half the Azeri government there."
The connections start with the first family. Arzu Aliyeva, one of Azeri

President Ilham Aliyev's two daughters has been the sole shareholder of a

central Prague-based company called ZODIAC

Immobilienbesitz since 2006.

A listing in the Czech land registry shows that the firm owns a EURO 1 million villa in a luxury neighborhood in Karlovy Vary.

<>[image: odiac2]


The Azeri president's daughter owns a luxury villa in the spa town of

Karlovy Vary
When reporters visited the hilly and posh residential neighborhood, the

villa looked well cared for, but empty. No one answered the doorbell.

The headquarters of Aliyeva's company are inside the Prague law offices of

Alfery-Hrdina, a firm that does audit, tax and legal services according to

a flyer. Pavel Alfery-Hrdina, a firm's representative refused to talk

about Aliyeva's company or any client's business.

Arzu Aliyeva is not the only family member with ownership of Czech

businesses either. Her maternal grandfather, Arif Pashayev, owns another

Prague and Karlovy Vary-based company,


Pashayev officially runs the National Aviation Academy. According to US

diplomatic cables made public by Wikileaks, however, the extended family

plays important roles in the Azeri economy. The US cables list the Pashayev

family as the "single most powerful family in Azerbaijan".

Pashayev controls PASHA Holding, an Azeri conglomerate involved in

insurance, banking, travel, construction and investment interests

including PASHA Bank, according to the companies website and an Ernst and

Young audit which lists him as the man with ultimate control. The managing

director is his son Mir Jamal Pashayev and the website brags it is one of

the largest new companies in Azerbaijan.

RETRO-INTER owns a number of properties in the Karlovy Vary area including

the newly erected Hotel Jeseter.

[image: zodiac3_small]<>

Jeseter belongs to a company controlled by Arif Pashayev, the father of

Azerbaijan's first lady
Hotel Jeseter, which is finishing construction, sits on a bank facing a dam

10 minutes from the town. A forest runs along one side and an exclusive,

gated Russian village on the other. The Russian deco style building sits on

the ruins of a former fishing house and plans call for 30 rooms, a

restaurant and two quays. The area used to be popular with locals who came

to relax and bathe, but after the only natural swimming pool was demolished

in ´90, the area lost its attractiveness for family weekends. The hotel is

controversial, with believers seeing its opening as a chance to resuscitate

the area, while skeptics worry that its monumental and inappropriate design

is out of place and its high prices preclude ordinary Czechs from visiting.

RETRO - INTER also owns a building site, a house and an apartment in the

surrounding towns of





The Businessman
While Arif Pashayev is the sole shareholder of RETRO-INTER, its director is

another Azeri-born Czech citizen, Fakhraddin Mirzoev who lives in Karlovy

Vary <>. In

addition to RETRO-INTER, he is director of Swiss-based TERMA TRAVEL


Although they operate in Karlovy Vary, the company has a subsidiary in

Prague, GLOBAL-ACCOUNTING-SERVICES.COM which shared offices with

RETRO-INTER until a few months ago. Mirzoev is involved directly or through

the TERMA group in a half dozen other


the Czech Republic.
Mirzoev appears to be a successful and connected man in Azeri circles in

the Czech Republic. He drives a Porsche, established a rally team sponsored

by the TERMA TRAVEL RACING TEAM and knows important people like Hornik,

according to his Facebook page.

"I know Mr. Mirzoev, because the Azeri ambassador is my friend and when we

had dealings, the representative of TERMA TRAVEL was often present," said

OCCRP reporters contacted Mirzoev who did not comment but did say "My

business is not connected to any other persons."

Mirzoev, who was an official agent of Azerbaijan Airlines, gave the

official welcome to the first Azerbaijan Airlines flight that landed at the

Prague airport in July of 2010.
The non-stop flight between the two capitals regularly shuttles other major

Azeri businessmen who have also chosen the Czech Republic.

[image: INFOGRAFIC-Azerbaijan-cehia_small]<>
A Cleric in Business
Other important Azeri investors in the area are Javanshir Pashazade, a

member of parliament in Baku and his brother, Allahshukur. Allahshukur

Pashazade is Sheikh-ul Islam, Grand Mufti of the Caucasus and the chairman

of the Religious Council of the Caucasus. He was counted in 2009 among the

500 most influential Muslim figures in the world.
According to registration


the brothers own a Czech company called Aynur KV that is also based in

Karlovy Vary. The firm owns an apartment


the center of Karlovy Vary.

Through his driver, Javanshir Pashazade denied any ownership of Czech


[image: zodiac6_small]<>

Allahshukur Pashazade, the Grand Mufti of the Caucasus, owns an apartment

complex in the Czech Republic
Allahshukur Pashazade is a controversial figure in the Azeri media. The

government-friendly religious leader, who frequently pledges Muslim loyalty

to Ilham Aliyev, is known in Azerbaijan for his connection to Ali Evsen, a

Turkish businessman currently under arrest in Spain for his alleged

involvement in a money laundering operation for Hussein Salem, a confidante

of former Egyptian leader Hosni Mubarak. Evsen's businesses have been

previously investigated here by


Pashazade's son is married to Evsen's daughter.
Azer Rashidoghlu, chairman of the "Tolerant" Center for Social Studies said

the Grand Mufti should step down if the information is true.

"There were lots of talks about a lack of transparency in The Board of

Caucasus Muslims and the business activity of Sheikh-ul Islam. He always

denied his involvement in business. He denied, because he knew that it is

not appropriate. It is indeed not appropriate."

Rashidoghlu said such ownership sets up a fundamental conflict of interest.
"If religious figure is dealing with business, especially in the countries

like Azerbaijan, he is risking facing a choice between his business

interests and the interests of Muslims."
Rashidoghlu says that may have already happened. The Grand Mufti has not

defended Muslim rights against the President such as a ban on hijab in

schools and the shutdown of mosques, he said.
"Instead, he always pledged support to president and his family in order to

be able to continue his business and to invest abroad."

Javanshir Pashazade's ownership is illegal under Azeri law according to one


[image: zodiac4_small]<>

Brothers Javanshir and Allahshukur Pashazade, one a Parlamentarian and the

other the Grand Mufti of the Caucasus, own an apartment complex in Karlovy

"Parliament members must not run businesses. It is prohibited by law. So if

they own the business, they violate the law," said Vasif Movsumov,

executive director of the Anti-Corruption Foundation, a Baku based civil

society organization. "The law restricts business activity - no matter, if

it is inside or outside the country - of the parliament members."

They are not the only ones. OCCRP previously reported that Arzu Aliyeva

along with her sister, Leyla and their mother Mehriban Aliyeva, own a slew

of Panama-based companies through which they secretly control gold fields,

a mobile phone company, a construction company and other high stake

investments back in


Mehriban Aliyeva is also a member of parliament. Calls and emails to the

government seeking comment were not returned.

"They are supposed to submit declarations and declare that they stopped

their business activity. Since that was not the case, it is a clear

indication of corruption." Movsumov said.
The apartment complex the Pashazades own through their firm is set in the

hills overseeing the center of Karlovy Vary and sits near one of the most

famous hotels in the region, the Hotel Imperial. This hotel, built in the

early 20th Century hosted celebrities including the Russian Emperor Paul I,

music composer Richard Strauss, Indian maharajas and Hollywood stars. The

complex is surrounded by narrow streets with old houses and the original

tessellated pavement.
The permitting and construction of the modern apartment complex right in

the middle of the historic center of Karlovy Vary was controversial. The

modern architecture contrasts with the unique and picturesque surrounding

buildings. The original building design was a story higher, but was

lowered in the face of local protests says a local journalist, Jaroslav

Dolina, who has followed the case for his newspaper Karlovarsky Denik. The

complex is still partially empty and banners offering luxury apartments

hang outside. Most of the names on the doorbells appear to be Russian.

Other MPs in Business
Another member of the Azerbaijani Parliament, Adil Aliyev and his brother

Allahverdi Aliyev, also do business in the Czech Republic. Adil Aliyev is a

shareholder in a company called West End Centre. This company owns land in

the western outskirts of Karlovy Vary. Allahverdi Aliyev's family started a

company called RAN Ltd in 2003 at the same Karlovy Vary address where two

TERMA TRAVEL GROUP companies were based.

[image: zodiac5_small]<>

A number of Azeri connected companies are located at a downtown building

in Karlovy Vary
Back in Azerbaijan, the brothers built their career in the police forces

under the leadership of a third older brother, Maharram Aliyev, a former

chief of the Baku police department and currently the ambassador of

Azerbaijan in Tajikistan. Adil Aliyev, who is also president of the

Kickboxing and Muai-Tai Federation, entered Parliament in 2005 after

leaving his job as a district police chief.

Allahverdi Aliyev, who used to also be a mid-level official in the Ministry

of Interior, shares ownership of his businesses, RAN Ltd. together with his

wife, Tamara and son, Ruslan Aliyev. The son, according to an interview he

gave to Azeri media, is the director of the Ateshgah Insurance group, owned

by the State Oil Company of Azerbaijan. Adil Aliyev did not deny ownership

of the businesses.

"I can't say anything in this regard. I have lots of relatives in Czech

Republic and they have many companies in Czech Republic. That is not a

He said he is aware of the legislation that prohibits Members of Parliament

to run businesses but refused to comment further on the issue.

Their RAN Ltd owns a house in the city center of


an old Czech town with a long Czech-German history about 43 km from Karlovy

Vary. It also owns shares in an apartment complex in Doubi.

https:// /occrp/index.php/en/ccwatch/cc-watch-indepth/1666-azerbaijans-czech-enclave

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