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AZERBAIJANI REGIME INSIDER BRINGS MILLIONS TO VIENNA’S GOLDEN QUARTER

The Azeri Times

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With polo shirts selling for €1,760 and tailored suits priced as high as €50,000, shopping at Kiton, an Italian fashion boutique in Vienna’s fashionable First District, is reserved for the wealthy.

The offices and penthouse apartments above the store also come with hefty price tags. In fact, they are among the most expensive in the city. Their largest single owner, René Benko, 40, is a well-known Austrian real estate mogul who has publicized this exclusive urban district as the “Golden Quarter.”

With the arrival of the Kiton store in 2014, the upscale neighborhood gained a curious tenant. One of the men behind it, Rasim Asadov, is an Azerbaijani businessman and regime insider who appears to have access to significant wealth.

His store has posted repeated losses and owed millions of euros of rent to a subsidiary of Benko’s powerful Signa Group development firm. Nevertheless, Asadov and his partners invested additional money into the business, enabling it to stay afloat.

In addition to the boutique, Asadov, 37, owns a valuable condo in the Golden Quarter that he purchased through a legal loophole, as well as another Austrian company that manages large sums of money.

But, though he may be a valuable tenant for the Golden Quarter, Asadov isn’t simply an enterprising businessman.

He is the son of Azerbaijan’s first post-independence minister of internal affairs – and a key player in the Azerbaijani Laundromat, a slush fund that was used to pay out large sums of money to European politicians and their family members who spoke positively about the Caucasian dictatorship. The scandal has already led to the resignation of a member of the Parliamentary Assembly of the Council of Europe.

Asadov is also a business partner of the cousin of Mehriban Aliyeva, Azerbaijan’s Vice President and the wife of President Ilham Aliyev.

2.5 Billion Euros Flowed Through Dark Channels

In early September, journalists from the Danish newspaper Berlingske and the Organized Crime and Corruption Reporting Project (OCCRP) reported on a series of suspicious transactions out of Azerbaijan, a dictatorship run by the Aliyev family. Some €2.5 billion allegedly flowed from the country’s ruling elite to European politicians who spoke highly of the regime even as it was arresting journalists and political activists.

The billions were smuggled into the EU, mostly through four shell companies registered in the United Kingdom. Journalists in 15 countries, including at the Süddeutsche Zeitung and the Guardian, analyzed the transaction data. DOSSIERtraced the cash flows to Austria and tracked down Asadov, an important figure in the operation.

Asadov is registered as the founder of Baktelekom MMC, a small company headquartered in Baku, Azebaijan’s capital, through which almost half the money was smuggled into the network. The name of the company bears a striking resemblance to the name of Azerbaijan’s state telecommunications company, Baktelecom. However, Rasim’s Baktelekom appears to be a paper company with no offices, no employees, no website, and no real business presence.

As DOSSIER’s research shows, Asadov appears at the other end of the money trail as well. In 2014, he flew from Sardinia to Montenegro in a private jet. The flight was paid for by “Hilux Services LLP,” one of the four Azerbaijani Laundromat shell companies. Payments to European politicians that are being investigated as bribes flowed through this same company.

Baktelekom is registered at an ordinary-looking Baku apartment building.Credit: OCCRP

Trouble in Paradise?

By 2014, the year that Asadov opened the Kiton store in the Golden Quarter, René Benko’s development project was going through a difficult period.

When he completed the first part of the district two years earlier, the Austrian daily Wirtschaftsblatt reported that his development firm, Signa Holding, had spent €500 million there. It was supposed to earn returns on its investment through “major business in retail” – high rents from shop owners.

When the first shop opened in the development in November 2012, local celebrities attended the opening and the newspapers were full of optimistic reports. Two years later, the tone had changed: The media reported that customers had stayed away, and some businesses were beginning to consider moving out.

Critics raised doubts about Benko’s usually strong instinct for the next big thing: They say he had apparently hoped that the luxury retail strip would attract wealthy tourists from the east. But the conflict in Ukraine, EU sanctions against Russia, and a weak ruble had foiled his plans. “Russians with high purchasing power are staying away,” Kurier wrote in July 2014.

At the end of August 2014, Die Presse did not mince words: The problems, it reported, were “Tuchlaubenhof and Seitzergasse, two of the main streets in the ‘Golden Quarter,’ that no one really wants to go to.”

Soon after, Asadov opened his business there.

Rent-free on the Luxury Strip?

But his store got off to a slow start. By the end of that year, the company recorded a net loss of over €430,000. Its second year was even worse, with a net loss of €1.76 million. Nevertheless, Asadov and his partners avoided insolvency by lending the business €2.4 million themselves. These personal loans were “subordinated,” meaning they were lower priority than others – they likely did not expect to get this money back.

They seem to have an understanding landlord in Am Hof 2 Immobilien GmbH, a company that belongs to Benko’s Signa Group.

According to the 2015 annual report of NAR Partners Handelsgesellschaft GmbH, the company that operates the Kiton store, unpaid rent made up the lion’s share of its accounts payable, amounting to over €4.5 million at the time. The report states that “negotiations with the landlord are currently underway to adjust the rent and reduce the rent for 2016 and the previous years.” It thus appears that Asadov was running a high-end business in Vienna’s most expensive quarter while owning his landlord millions.

When asked about the tenancy, a Signa Group lawyer wrote: “There was and is no business relationship with Rasim [Asadov] personally.” The Signa Group claimed not to have “any detailed knowledge” of Asadov and claims not to have known that he has close ties to the government of Azerbaijan.

The current management of the Kiton store has also distanced itself from Asadov. While he still co-owns the company, a spokesperson said they had no knowledge of his other business dealings.

The company representative declined to comment about its past performance, stating only that its previous management was fired in May 2017. The business, the spokesperson wrote, has since been restructured and is now being run more professionally. Asadov himself did not respond to DOSSIER’s written requests for comment.

Vienna’s Golden Quarter.Credit: Dossier

A Real Estate Loophole

The Kiton shop is not the only business relationship between Asadov and Benko’s Signa Group. On May 17, 2014, he bought a condominium of almost 300 square meters from Tuchlauben Immobilien GmbH, another subsidiary of the Signa Group, for about €4 million. The apartment is also on the Seitzergasse, diagonally opposite the Kiton store.

When foreign nationals purchase real estate in Austria, the government must generally approve the transaction. However, Asadov used a loophole.

In the purchase contract, the managing director of ARP Twelve GmbH, the company that bought the property, claimed that the majority share of the business was not in foreign hands. This was technically true, since it was, in fact, owned by another Austrian company called RA Mountain Holding GmbH.

This company, in turn, was fully owned by Asadov. This simple loophole in the Vienna law on the purchase of real estate by foreign nationals allowed him to evade scrutiny. Signa declined to respond to DOSSIER’s request for comment on the apartment deal, citing privacy.

“Start-up Losses” in the Millions

Despite the high-loss fashion business and the expensive real estate purchase, Asadov likely has access to much greater financial resources. In its registration documents, another company he has operated in Vienna since May 2014, AE BG Eta Holding GmbH, lists its purpose as “the administration and management of personal assets, especially … aircraft.”

Documents accessible to the public suggest that the company manages a great deal of money. By the end of its second year of business, it had generated a net loss of almost €7 million. According to its annual report, these “start-up losses” were compensated by an unknown source. Asadov’s business partner in this endeavor is well-known: None other than Mirjalal Pashayev, the cousin of the First Lady of Azerbaijan, holds 50 percent of the shares.

This story is part of the Global Anti-Corruption Consortium, a collaboration started by OCCRP and Transparency International. For more information, click here.

Society

European film festival in Baku: a Dutch cat, a Hungarian horse and a ‘faceless’ French artist

The Azeri Times

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The 9th European Film Festival has officially begun in Baku.

The event is organised by the European Union in Azerbaijan and will end on 21 October, until which time the public is invited to view 19 European films free of charge.

Here are some of the films we recommend:

The documentary film Wild Amsterdam, accompanied by director Mark Verkerk and producer Ignas van Schaick, will be screened at the festival. The film centres around the animals of Amsterdam, but not in a way you might expect: the story is told from the perspective of a cat, who shows us how squirrels, pigeons and waterfowl live in Amsterdam’s canals and parks.

The directors say that the consultation with ecologists and other specialists took half a year by itself. The film is a viewing wonder, dynamic and modern. For example, one scene depicts the retrieval of bicycles from the bottom of the canal with the help of special machinery. The scene looks as if it has been cut right out of a thriller because of how it traumatises the crabs living on the bottom.

The film Kincsem – Bet on Revenge is from Hungary, and also concerns the fate of an animal – a racehorse who belongs to a broke aristocrat forced to earn money through racing. However, the film is not about horseracing, but rather about competition between members of high-class society in the Austrian Empire. The film’s action revolves around the young aristocrat who becomes involved in a dispute with an Austrian officer, whose daughter later falls for the main character.

Barbara, a film by Christian Petzold, is a drama shot in 2012 which takes viewers back to 1980 when Germany was still divided by the Berlin Wall. The main heroine of the film lives in the German Democratic Republic and dreams of leaving. Forced to work in the country and under constant surveillance, she methodically prepares her plan to escape. At first it seems everything will work out and that nobody can prevent her from leaving, including the all-powerful Stasi. However, an inconvenient and unexpected attachment to one of her colleagues jeopardises her escape.

Latvian film Dream Team 1935 by Aigars Grauba was also shot in 2012 and also offers an excursion into the past – to the pre-war period of 1935 when the first European Basketball Championship took place in Geneva. Participation in the championship was a great chance for national teams to go down in sports history. The Latvian team seizes the opportunity, though young trainer Baumanis soon comes to understand that it is far more important to overcome oneself than one’s enemy…

Halima’s Path is the work of Croatian director Arsen Anton Ostoyich, and is dedicated to one of the bloodiest wars of the second half of the 20th century – the war in former Yugoslavia. The action takes place in the post-war years in Bosnia. A woman by the name of Halima who lost her husband and son (though not biological) dreams of finding their remains in order to give them a proper burial. She is only able to do this with the help of DNA analysis. While she is able to find her husband’s remains, she finds it difficult to do so in the case of her son. Halima must then go through some hardship to find the biological mother of her son in order to find him.

The French film See You Up There is also devoted to war and its consequences. This time, the action takes place during World War I. The story begins in the final days of the war, when two young soldiers – an artist from a wealthy family, Edouard, and a former bank employee, Albert – are forced to go to their certain deaths on the orders of a malicious captain. Edouard, whose face has been disfigured, saves Albert, which firmly binds the two friends together: now Edouard is an ‘invisible’ artist, and Albert his impresario.

In addition to film screenings, the festival includes workshops and discussions with European directors.

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Religion

Azerbaijani mullahs given cars by the state

The Azeri Times

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Fourteen mullahs have received Khazar SDs, locally made cars, as a gift from the state in Azerbaijan.

Seven more will receive the same gift in November. According to the deputy chairman of the State Committee for Work with Religious Organisations, Sayyad Aran, the gifts were given to some of the country’s most authoritative and respected religious figures.

However, the executive director of the Foundation for the Promotion of Cultural Values, Mehman Ismailov, saysthe vehicles are meant to improve the material and technical base of religious communities, that is, it is not a gift to them personally, but to help them in their work.

The keys to the automobiles were only given to men, despite the fact that there are female religious figures in the country. However, Aran says only a few of them have official status.

This has already happened before in the Nakhchivan Autonomous Republic. Four local mullahs received NAZ Lifan 330s.

This case has caused a mixed reaction among the public.

For example, economist Natiq Jafarli says that such “generosity” from the state violates not only ethical norms, but also the principle of the separation of church and state. Moreover, Jafarli says, this poses a serious danger to Azerbaijan, since religious people, seeing the closeness of religious figures to the state, may lose confidence in them, move away from them and start looking for spiritual leaders in other countries.

Theologian and journalist Rasul Mirhashimli disagrees with him. In his opinion, such a gift is not fraught with any problems: “These religious figures will continue to work in the same way as they did before receiving these gifts.”

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Azerbaijan

Deadly bus accident most discussed topic of the week in Azerbaijan

The Azeri Times

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Two people died and forty were injured earlier this week when a bus crashed into a freight train at a railway crossing. The incident occurred in one of Baku’s suburbs.

The accident has been discussed all week by the public, who were shocked to hear that a public transport worker was at fault. Apparently, the bus driver did not apply the brakes while approaching the railway crossing nor did he notice the train as it bore down on him.

As a result, the bus driver, Alikhan Shiraliyev, and the bus company’s dispatcher, Mubariz Farajev, have been arrested.

Shiraliyev was arrested for not undergoing a medical examination before heading out on the bus, while the dispatcher was taken into custody for allowing him to do so.

A number of rumors arose during the investigation. One version of events goes that the bus driver was a former convict who was under the influence of drugs when the accident occurred. Another rumor says that the mother of a boy who was killed in the crash had committed suicide. However, the boy’s relatives have denied this rumor.

Around 750 people died in car and transportation-related accidents in 2017 in Azerbaijan.

Facebook users have been discussing the transport sector as a whole in Azerbaijan, noting that drivers often ignore the rules of the road and do not ensure the safety of their passengers:

“I wonder how many more of these accidents and deaths we need for the city authorities to seriously take care of issues in municipal transport – specifically, lawlessness.”

“None of the passengers support you if you mention an issue to the driver. People don’t even have the elementary instinct of self-preservation. In this case, the driver is of course guilty. But the passengers themselves are also responsible.”

“Of course the train tracks shouldn’t have been laid right here – right in the middle of the street! Those who built the tracks are guilty.”

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