Kyrgyzstan: Azerbaijan Ruling Family Sought Gold Interests

Azerbaijan has intermittently displayed interest in investing in Kyrgyzstan, but the latest set of revelations courtesy of the Panama Papers documents leak suggests that even the presidential family in Baku wanted a piece of the action.

In 2012, an obscure company called Redgold Estates Azerbaijan Ltd. became one of several international bidders hoping to snap up some out of a set of around a dozen gold concessions at an auction in Kyrgyzstan.

In the evening, the televised auction was called off when a group of demonstrators charged into a broadcast studio demanding a halt to proceedings.

As is the norm with offshore companies, tracing the line from a public company to the ultimate beneficiaries is a confusing business. Following the thread linking Redgold Estates Azerbaijan Ltd. to the family of Azerbaijan’s President Ilham Aliyev is tricky and requires some circumstantial sleuthing.

All the claims are based on documents leaked from Panama-based law firm Mossack Fonseca, which has forged a reputation for providing offshore company services to all-comers.

According to an account published on April 4 by the Organized Crime and Corruption Reporting Project (OCCRP), Redgold Estates Azerbaijan Ltd. was incorporated 20 months before the Kyrgyzstan auction, in which it submitted five bids.

The leaked Mossack Fonseca files show that another company with the same name, Redgold Estates Ltd., was created six weeks before that in the Seychelles, one of many offshore jurisdiction favored for its privacy laws. Other than the name, the two company also shared the same Baku address.

The bulk of the Seychelles-registered outfit is in turn owned by another three offshore companies (Panama-based Londex Resources, with 45 percent; Willy & Meris, with 29 percent; and Seychelles-based Fargate Mining Corp., with 15 percent).

A fourth stakeholder is British-based Globex International LLP (11 percent), which itself turns out to be owned by another three Panamanian offshore companies: Hising Management S.A., Lynden Management Group Inc., and Arblos Management Corp. Previous investigations by OCCRP have found these Panamanian companies are all managed by President Aliyev’s daughters, Leyla and Arzu, together with Swiss business Olivier Mestelan.

And the three Panamanian companies own Londex Resources, whose 45 percent stake in the Redgold Estates Ltd. translates in simple terms into majority control over the gold consortium. Incidentally, OCCRP notes that the same four companies that own Redgold Estates Ltd. also control another gold mining consortium that has been awarded six gold fields in Azerbaijan. 

As this case and that of the grandson of Kazakhstan’s President Nursultan Nazarbayev have neatly demonstrated, the desire of people close to power to gain dubious riches is matched only by their striving for secrecy.

Kyrgyzstan: Azerbaijan Ruling Family Sought Gold Interests

1 / 1
> <