Several recent, high-profile arrests of entrepreneurs in Azerbaijan are believed to be politically connected. The detainees all had ties to former minister of economic development Farhad Aliyev, who was arrested in October for allegedly conspiring to launch a coup.

Political analysts in Baku believe the arrests could signal a significant shake-up of Azerbaijan's economic elite in the wake of the November parliamentary elections. [For background see the Eurasia Insight archive]. The wave of arrests began in early December, when Tayyar Shukurov, the owner of NJT 2000 Company, one of the biggest producers of raw materials used in the construction industry, was detained. Shortly thereafter, three Zulfugarly brothers – Nurredin, Logman and Rovshan, who ran the country's largest steel plant, as well as a leading electronics firm -- found themselves in custody. Steel workers at the Bakupoladtokme plant have gone on strike to protest the arrests.

Authorities have provided no public explanation for Shukurov's arrest. Meanwhile, the Zulfugarly brothers were detained on charges of extortion and racketeering brought by a business rival, Afat Aliyeva-Abdullayeva. A lawyer for the Zulfugarly brothers, Aslan Ismayilov, complained that he did not have adequate opportunities to consult with his clients. Ismayilov insisted his clients were innocent, and argued that their arrests were politically motivated – designed to facilitate the transfer of economic assets from the control of one political faction to another. Business rivals are "trying to steal the property of local entrepreneurs," Ismayilov told journalists on December 13.

"They [the Zulfugarly brothers] were arrested with violation of all procedures and I had no chance to see them during first three days of detention," Ismayilov continued. "The police took all documents from their offices and conducted the first court hearing without my participation. While the brothers refused the services of a public attorney and demanded to retain me, the court ignored their request."

According to government sources, who spoke on condition of anonymity, Shukurov's problems are also politically related. Shukurov reportedly has carried on a business feud with State Property Committee (SPC) chief Karam Hasanov. The SPC now operates independently after earlier being subordinate to the Ministry for Economic Development.

Shukurov and the Zulfugarly brothers are believed to be business allies of Farhad Aliyev, according to a report published in Realniy Azerbaijan, a newspaper reportedly with strong ties to Kamaladdin Heydarov, the head of Azerbaijan's Customs Committee. The report was published prior to Farhad Aliyev's arrest, which occurred less than three weeks before the parliamentary vote. [For background see the Eurasia Insight archive].

Farhad Aliyev and Heydarov supposedly engaged in a long-running struggle for control of lucrative economic sectors, some Baku political observers say.

Tayyar Shukurov and Nureddin Zulfugarly are also members of Entrepreneurs Council -- a business association closely connected to Farhad Aliyev. The council recently sparked a highly publicized scandal by airing allegations about corruption in the customs service. Ismayilov, the attorney who also is a member of the Entrepreneurs Council, said several other council members, in addition to Shukurov and the Zulfugarly brothers, have been detained in recent days.

The Zulfugarly brothers took over the Bakupoladtokme steel plant in 2001 under shady circumstances, alleged Ramiz Zeynalov, a lawyer formerly involved in a court case brought by the factory's previous owner, Poladkhan Kerimov. After Kerimov became embroiled in a tax evasion case, the steel plant was re-auctioned. Zeynalov claimed that Farhad Aliyev rigged the process so that the Zulfugarlys could gain control. Zeynalov went on to note that the source of the charges against the Zulfugarlys – the businesswoman Aliyeva-Abdullayeva – was also a central figure in the case against Kerimov, who reportedly had a close relationship with Prime Minister Artur Rasizade.

Meanwhile, several other notable changes in Azerbaijan's business landscape have occurred in recent weeks. According to a government source, Paolo Parviz, an Azeri from Iran who holds American citizenship, has disposed of his business interests in Azerbaijan, including the Hyatt hotel chain in Baku, and has left the country. The hotels are now being operated by a Kazakhstan-based concern. Among Parviz's other holdings was a stake in Baku Steel Company. The government official did not know why Parviz sold his interests, or where he went. Parviz reportedly had a friendly relationship with former president Heidar Aliyev, who died in 2003 and who was the father of incumbent chief executive Ilham Aliyev. [For background information see the Eurasia Insight archive].

In addition, the APA news agency has reported that tax inspectors are cracking down on the Azpetrol conglomerate. Analysts in Baku suggest the conglomerate's tax issues could be linked to Farhad Aliyev's case. Some observers believe the struggle to take over assets from Aliyev's clan could intensify in the coming weeks and months, possibly prompting a new round of arrests.