Aliyevs‘ secret mining empire


by Miranda Patrucic, Eleanor Rose, Lejla Camdzic and Khadija Ismayilova

At the end of a hard month of work, Jumshud Asgerli, a 46-year-old geologist, war veteran and father of three, was crestfallen when he did not receive his expected salary from the Azerbaijani gold mine where he worked. Soon after, he was among 300 other employees that got an email informing them they were taking a mandatory two-month vacation.“After two months they sent us another email to say we’d be on vacation for an unknown period and would receive two thirds of our salary,” said Asgerli.

But nearly two years later, the employees haven’t been paid a cent officially, but they are still officially full-time mine workers who, under Azerbaijani law, can’t take jobs elsewhere. Some have lost everything, they are stuck in a hellish limbo.

Their employer, Azerbaijan International Mineral Resources Operating Company Ltd. (AIMROC), came out of nowhere suddenly to become the second-largest gold producer in the country. Then it disappeared as quickly as it came, leaving employees in a desperate search to find out who actually was employing them.

Frustrated and desperate, they reached out to every government institution they could think of – from the Ministry of Ecology and Natural Resources and the Ministry of Labor and Social Protection of Population to the Parliament to the president himself. “They all pretend they don’t know anything,” said Asgerli.

But, cloaked behind an offshore organization, their employers were much closer than they imagined. They saw them almost daily wearing the latest fashions, carrying expensive handbags, and smiling from the pages of newspapers and magazines. Their employers were on TV attending openings and gala ceremonies and grand events talking about how great Azerbaijan was.

Their employers were Leyla and Arzu Aliyeva, the daughters of President Ilham Aliyev.

Photo Arzu Aliyeva: azertag.azThis information can be found in data from the Panama-based offshore services provider Mossack Fonseca, obtained by the German newspaper Süddeutsche Zeitung and shared by the International Consortium of Investigative Journalists with the OCCRP and more than 100 other media partners from 82 countries.

Golden Days

Nine years ago, the president awarded a  consortium of six gold fields worth billions of dollars to one company in the United Kingdom (UK) and three in offshore jurisdictions: Globex International LLP, Londex Resources S.A., Willy & Meyris S.A. and Fargate Mining Corporation. But in reality, the fields went to his family.

A 2012 investigation by Radio Free Europe/Radio Liberty and the Organized Crime and Corruption Reporting Project (OCCRP) journalist Khadija Ismayilova showed the daughters were behind Globex International LLP which owned 11 percent of the consortium.

But the daughters’ stake appears to be significantly bigger than previously reported.

The leaked records reveal that the daughters control  Londex Resources S.A., a Panama company with a 45-percent stake in the consortium, putting their total control at 56 percent. The company has been the main operating company under the agreement and has been responsible for negotiations with the government.

It has acted on behalf of the other three partners to secure funding and manage the mining development.

The Aliyevs did not respond to repeated requests for comment from OCCRP.

As for the other three partners, Londex Resources S.A. owns AIMROC. The third company, Fargate Mining Corporation, was incorporated the same day as Londex Resources S.A. and seems to be controlled by Aliyev’s close associate and business partner  Nasib Hasanov, according to the leaked records. The government said the fourth company in the consortium, Willy & Meyris S.A., is registered in Panama, but OCCRP reporters couldn’t find a trace of it. That share, given past patterns of family owned businesses, may be owned by them or someone close to them as well.

Financial records obtained by OCCRP show that Londex Resources S.A. spent nearly US$ 230 million to set up and operate the mining business. A factory was built in the mining town of Chovdar in western Azerbaijan and the consortium produced as much as US$ 30 million in gold before it abruptly ceased operations.

How did a company with such possibilities disappear so quickly? Some say the company had trouble selling gold on the world market due to its secretive ownership structure, while others are saying the consortium is still looking to sell.

Workers blame Londex Resources S.A. for their suffering. “The main company was Londex Resources S.A. The main company is responsible for everything,” said Asgerli.

Whatever the reason, the fact the workers have gone without pay for nearly two years is, at the very least, an indictment of managerial indifference and incompetence.

The Aliyevs’ Gold Rush

In the 2000s, the hamlet of Chovdar was just another small mountain village in Azerbaijan – unassuming and rural, with a local population of wolves and foxes that occasionally picked off the villagers’ chickens.

Archaeological remains sketch a biography of the hamlet: Bronze Age burial mounds; an early Caucasian/Albanian church; later medieval Muslim sites. According to historians who studied the site, the relics are characteristic of the region, which like many other areas of Azerbaijan is now home to families displaced in the early 1990s by the Nagorno-Karabakh conflict with Armenia, a long-simmering dispute which flared up again on Saturday.

The village of Chovdar, where miners and refugees from Nagorno-Karabakh have been left abandoned by a local mine owned by the president’s daughters. (Credit: OCCRP)But Chovdar stood out in one important way: it sits atop fabulous deposits of gold ore estimated at one point to be worth as much as US$ 2.5 billion. Chovdar is thought to be the richest of several gold deposits in the country. Because industrial gold production requires investment and infrastructure, it was not until after the fall of the Soviet Union and independence that Azerbaijani authorities took notice.

In the oil boom of the mid-1990s, foreign capital flooded into Azerbaijan through production sharing agreements (PSAs) in which investors paid down costs and contributed expertise to develop rich natural resources, in return for a share of the profits.

In 1997, the oil industry  PSA model was applied to the right to mine nine copper and gold development properties in three areas of Azerbaijan. These were signed over with much fanfare by then-President Heydar Aliyev to RV Investment Group Services LLC, a US firm based in Delaware that today is known as Anglo Asian Mining PLC.

Anglo Asian Mining is run by Iranian businessman Reza Vaziri.

Vaziri at first failed to secure capital to invest and the project nearly died, but a large and continuous rise in gold prices from US$ 350 an ounce in 2001 to more than US$ 1,800 an ounce 10 years later saved him. Azerbaijan started to think big about gold mining. The media wrote of large-scale construction of modern gold-mining tunnels and factories that would put Azerbaijan among the largest suppliers of gold on the world market.

In June 2005, Azerbaijan  Minister of Ecology and Natural Resources Huseyn Baghirov announced that 30 new fields of precious metals, including four gold deposits, had been identified through survey work over the previous three years. One was of special importance: Chovdar in western Azerbaijan.

The media reported that the gold reserves in Chovdar dwarfed all of the other fields and Minister Baghirov announced that talks about developing Chovdar were underway with foreign companies.

Only one name was ever mentioned: RV Investment Group Services LLC, which  told Trend News Agency in August 2005 that it was preparing a proposal to present the government for developing Chovdar. Company experts visited the field.

By the end of 2005, the price of gold had almost doubled to more than US$ 600 per ounce. RV Investment Group Services LLC begun to build facilities to extract 20 tons of gold at its Gedebey site, not far from Chovdar. Chovdar was not mentioned again.

But more than 12,000 kilometers away in Panama, one of the most popular places in the world to set up new companies in secret,  a company called Londex Resources S.A. appeared. Londex took a leading role in a consortium it formed with three other companies. The company, on behalf of the consortium, would lead negotiations with the government and the president of Azerbaijan for a mining license to get at some of the country’s best deposits.

The PSA: Aliyevs’ Gain, Azerbaijan’s Loss

On Dec. 30, the last Saturday of 2006 and a non-working day, the government of Azerbaijan secretly signed over rights to the Chovdar mine and five other sites to the Londex-led consortium.

Unlike the PSA agreements signed with RV Investment Group Services LLC in Azerbaijan, this one was never published. The only information about it came during a Parliamentary discussion in June 2007. The contract was approved even though members of Parliament complained that the consortium’s ownership wasn’t transparent, that the contract did not follow normal bidding procedures, and that none of the companies had any record of actual mining. The  Parliamentarians complained that the deal worked against national interests.

At the hearings, Valeh Aleskerov, chair of the Natural Resources Committee of the Milli Mejlis (the Azerbaijani parliament), the body that reviewed the contract, advocated for the deal.

Aleskerov had worked with President Aliyev when they were both vice presidents at the state oil company, and he said the government had negotiated with three other companies, but dismissed their offers because those firms had demanded exclusive rights and offered no guarantees.

OCCRP could find no evidence that a tender was ever issued regarding the gold mine.

The other terms of the deal included a 30-year lease  on the mineral fields, and a government profit share of 30 percent after all consortium costs were recovered. The deal was much more favorable than the one RV Investment Group Services LLC had signed a few years earlier. The consortium would end up getting 70 percent of profits compared to only 49 percent in the RV Investment Group Services LLC deal.

Aleskerov praised the fact that government would also receive a  US$ 2 million bonus. But financial records OCCRP obtained show that the consortium not only never paid the bonus, but is facing a US$ 2.8 million penalty for non-payment. While not paying the bonus represents a breach of contract that would allow the government to terminate the contract, the records show consortium members were not at all concerned about such an event. Auditors who examined the financial statements noted that the government never requested the payment.

The consortium received other benefits. It was not required to pay any taxes other than the 22 percent income tax, and, unlike RV Investment Group Services LLC, it had higher quotas for hiring foreign nationals. Azerbaijan does not have a mining tradition and the ability to hire skilled foreign workers is of huge importance for any mine’s success.

“Once the agreement was signed we realized they had much better terms then we did,” said a mining executive with knowledge of the company who asked to remain anonymous. “Perhaps the fact that daughters were involved had something to do with that.”

Fall of the Empire: Naivety or Greed?

The Aliyevs were quick to get the business going.

“When I joined they had already committed a fair amount of money to setting up the project company and quarry assets, the portfolio of mining projects and mineral properties, but they obviously were not mining people,” said Carl Caumartin, CEO from 2008 until 2011 of AIMROC, the local operating company established by Londex Resources S.A.

With the price of gold at US$ 900 per ounce, the company was “chasing all kinds of properties and projects” and throwing money around. Caumartin says he stopped it and focused on Chovdar, believing it potentially held 1.3 million ounces of gold, which at the time was worth more than US$ 1 billion.

And the price was still rising, with some estimates saying it could reach as much US$ 3,000 per ounce. With some US$ 3 billion at stake, the Aliyevs were eager for a big return on their investment.

Caumartin tells a story of what he calls AIMROC’s naivety. In Ganja, they bought a farm that was supposed to be used as an exploration base. Londex Resources leaders picked the place because it had an underground cave where they wanted to smelt their gold securely.

“We got a gold room all figured out. Let’s find gold now. It became our inside joke,” said Caumartin.

He left in mid-2011. He said he was not totally in favor of the direction owners wanted to take the firm. The company had decided to speed up development of the project while Caumartin preferred to complete the full evaluation and engineering studies first before digging.

That might have been one of the factors that contributed to the project’s failure to date. “They probably took a shortcut technically speaking … they were eager to get a return on the money invested,” Caumartin said.

After he left, the company commissioned the plant and started production. The first gold bar was produced in late 2012. “The performance was not optimal and they were struggling to get the (financial) recovery they were hoping to get,” said Caumartin.

Still, according to workers, the company managed to produce more than 2,000 kilograms of gold before it abruptly stopped production in April 2014. The offices closed, and the workers were put on leave. No one is responding to calls.

Nacaf Mammadov, a supervisor of gold production, who has worked for the company since August 2012, said: “Production of the gold went very well. Our directors told us to produce, let’s say, 150 kilograms of gold a month. And we did it. We have seen them take (away the) gold with special security cars.”

Despite this, workers were put on leave.

On June 27, 2014, Arda Arkun,  AIMROC’s then-chief executive officer, emailed workers saying they would not be able to make salary payments “due to having no access to funding” and he expressed hope they would receive funding in the nearest future so that “we can restart producing gold.”

“We are working very hard on getting funding into the company to be able to start operations in the near future. We are meeting with various gold refineries to sell our gold production and to be able to start operations at our Chovdar mine.”

Workers never heard from the company again.

Caumartin said the Aliyevs got in over their heads: “There is certain naivety or paradox there that they can be very successful in retail, financial, and in other areas – transportation, hotels – and they assume that just because they made a fortune in other sectors, going into mining can be just as easy. And it is not that complicated, but there are some things you need to know. We call it dumb money.”

The consortium, unlike its counterparts in Azerbaijan, did not take the traditional mining path to a listing on the London (or some other) Stock Exchange.

“The great majority of mining companies are publicly listed companies. It’s only small ones or ones in underdeveloped countries where you might get private ones. It takes quite a lot of capital to get a mine going. So you’ve got to be a fairly rich individual to be able to fund it privately,” said a mining executive with knowledge of the company who refused to be named.

AIMROC couldn’t be found on the lists of any major stock exchange. It didn’t publish production results – in fact, its right to hide information about its business activities was enshrined in its PSA.

Unlike other mining companies that raised funds for exploration through capital markets, Londex Resources S.A. took out massive loans from several banks, including two owned by the family: Xalq Bank and Pasha Bank. Both banks have benefitted from deposits coming from the state, public authorities and state companies.

By the end of 2012, Londex Resources S.A. had  borrowed US$ 146 million. It does not appear from records that any of that was paid back. At the same time, it has spent nearly US$ 230 million starting mining operations.

It is unknown what future AIMROC has. According to its latest annual report: “The process is currently suspended pending more funding, however, the members are confident the funding will be obtained and exploration subsequently restarted.”

Workers said officials from the Ministry of Ecology and Mineral Resources told them that since July 2014, Londex Resources, S.A. has tried in vain to sell its shares. According to the spokesman, “Maybe after selling, all the problems could be fixed.”

Workers show paperwork from ministries who they have asked for help but the ministries say they don’t know who owns the mine even though it’s owned by the President’s daughter. (Source: RFERL)Workers Left High and Dry

Today the mine that was supposed to bring hope and employment to the village is deserted. OCCRP reporters recently visited it in the steep mountains surrounding the village. The last few kilometers are not much more than a dirt path. Once past a decrepit railroad freight station, there are no buildings anywhere along the last five kilometers to the mine entrance.

From a distance, recently constructed worker housing can be seen on a hill near the mine entrance. At the mine entrance, a single guard acknowledged that the mine has not been operating “for a couple years.”

As soon as the reporter took a cellphone out of his pocket, the guard warned him and his driver to leave the area immediately. Seeing nothing else moving in sight, the reporter left.

Poverty, however, is evident. Life remains hard in Chovdar, where many of the mine’s 300 workers lived. Hard times can be seen in the old houses, broken windows and doors, and people bundled into old clothes to protect themselves from cold.

Others, unable to get jobs elsewhere, have endured personal tragedies.

Miner Yahya Verdiyev, who spent two days in prison after a court sentenced him for not paying back a bank loan, wonders why the mine owners, who havn’t paid him in two years, aren’t in jail. The mine is owned by the President Ilham Aliyev’s daughters. (Credit: RFERL)Yahya Verdiyev had been a mineworker. “I took credits from the bank. After we couldn’t get our salary, I couldn’t pay my credit. The bank took me to court and I was sentenced to two days in prison. I don’t understand how, if I can’t pay my loan, they can arrest me. But the company does not pay anything to 300 people and they can’t even find it.” Workers also told the story of a colleague who lost his apartment and now must lives in a rented place.

Another worker, Parviz Isayev said: “We all put our lives at risk. Cyanide and other chemicals are very bad for our bodies. But we needed to work. We are residents of the Azerbaijan Republic. But our government doesn’t care about our problems. We don’t know where to go. Who can help us. Even courts… We don’t know what to do.”

Last Bit of Hope

Barnaby Pace, a campaigner at Global Witness said “The clear corruption concerns raised here shows the need to know who really owns and controls companies, especially those involved in natural resources extraction where transparency is especially important.

Global Witness is calling for tax havens to end the abuse of anonymously owned companies by creating public registries of who really owns and controls companies.

“Secretly owned companies are the getaway cars for terrorists, dictators, money launderers and tax evaders all over the world. The time has clearly come to take away the keys, by requiring the publication of information on who really owns and controls these companies. This would make life much harder for the criminals,” he said.

But that will be too late to help Azerbaijan’s miners.

In late January 2016 and again in March, dozens of gold mine workers marched across the capital to the Ministry of Labor and Social Protection of Population, the Ministry of Ecology and Natural Resources, and the Presidential Administration building before reaching the Parliament.

“All we want is our unpaid salary,” said geologist Asgerli, who hasn’t been paid for almost two years. “But there is nobody who could help us.”

“All of them say it is not their responsibility,” said Mehman Ismayilov, another protesting worker.

Zohrab Ismayil, a Michigan University researcher with expertise on the use of oil revenues, public investments and public policy, said, “Right now we can see the results of the conflict of interest. Officials are ‘silent’. Workers have protested several times with no results. Because everybody knows they can’t do anything against this company. They haven’t been paid and the government is still silent. They broke the condition of the agreement and the government is still silent … because ‘officials’ don’t have any ability to do anything against this ‘international’ company.”

Officials advised the workers to go to court. It represents their last hope. Most workers said they don’t believe the court will help them. But two decided to trust the system.

Asgerli first filed a lawsuit against Aliyevs’ Londex Resources S.A. in February demanding his unpaid salary. The Yasamal District Court where the company had an office referred him to Khatai District Court because that’s where Londex is formally registered.

The Khatai District Court will hear his case on Wednesday (April 6). He said he read these companies are owned by the First Family, but he did not see their names anywhere.

“For me everything will be crystal clear after my court case against Londex Resources S.A. I will see how just they will be during the court process. We will see.”

Additional reporting by Irene Velska, Lejla Sarcevic and Stella Roque. Radio Free Europe/Radio Liberty contributed to this report.

Originally appeared on the OCCRP website

Azərbaycanlılar Sarkisyanı Berlində aksiya ilə qarşıladı (VİDEO)


Aprelin 6-da  Ermənistan prezidenti Serj Sarkisyanın Almaniyaya səfəri başlayıb. Bu münasibətlə  azərbaycanlılar Berlində aksiya keçiriblər. Onlar  əllərində Azərbaycan, Türkiyə və Almaniya bayraqlarını tutaraq,   „Azərbaycan“, „Qarabağ bizimdir, bizm olacaq“, „şəhidlər ölməz, Vətən bölünməz“  kimi  şüarlar  səsləndiriblər. Sonra işğal olunmuş rayonların adları çəkilib və aksiyaçılar „Qarabağ“ deyə qışqırıblar.

Aksiyada Almaniyada, habelə Avropanın digər ölkələrində yaşayan azərbaycanlılar iştirak ediblər.

Russia has banned the transit of Ukrainian candies for Azerbaijan


Transit Ukrainian confectionery blocked by the Russian Federation towards Georgia and Azerbaijan, the president said „Ukrkondprom“ Association Alexander Baldynyuk.

„Almost fifty wagons of Ukrainian production destination for more than a month in Azerbaijan stood at the customs post“ Derbent „in Dagestan, and only in the beginning of April, they launched back in Ukraine. A few days ago the Russian Customs stopped all shipments at the customs post „Lars“ on the border with Georgia, blocking our supplies in the country „, – said Baldynyuk Interfax.

According to him, the staff of the respective customs posts of Russia explained that transit through the territory of their country for Ukrainian confectionery products again denied due to sanitary embargo imposed by Rospotrebnadzor back in 2014.

Writer Akram Aylisli charged under Article 221.1 (hooliganism) of the Criminal Code of Azerbaijan


Writer Akram Aylisli charged under Article 221.1 (hooliganism) of the Criminal Code of Azerbaijan. This was on his Facebook page wrote his lawyer Elchin Sadigov

Today A.Aylisli together with a lawyer called to the Police Department of air transport, where he was charged.

The indictment states that on March 30 at Heydar Aliyev International Airport A.Aylisli violated the rules of conduct in society, insulted and hit a 35-year-old employee of the State Customs Committee Nihal Seyidov. As a result of the impact from the customs formed bruise.

A.Aylisli himself disagreed with the charges. He says he does not swear and did not hit anyone. A.Aylisli believes that he is being persecuted for writing

P.S Shameful for Azerbaijan

EAN

Глава МИД Германии: „Статус-кво может привести к обострению в Карабахе“


 Военные действия в районе карабахского конфликта должны быть прекращены, так как ситуация в регионе крайне хрупкая. Об этом заявил сегодня в Берлине министр иностранных дел ФРГ Франк-Вальтер Штайнмайер, передает ИТАР-ТАСС.

„В настоящее время обстановка очень хрупкая“, – сказал глава германской дипломатии. По его словам, если статус-кво сохранится, то это может привести к повторному обострению ситуации.

Глава германского МИД назвал несколько условий, которые необходимы на данном этапе для деэскалации карабахского конфликта.

„Во-первых, договориться о долгосрочном отказе от применения оружия. Во-вторых, начать процесс стабилизирующих и доверительных мер и таким образом подготовиться к тому, чтобы вновь состоялись переговоры в рамках Минской группы ОБСЕ относительно будущего статуса региона, хотелось бы, чтобы это было не в очень далеком будущем“, – заявил Штайнмайер, который ранее в среду провел встречу с президентом Армении Сержем Саргсяном.

EAN

THE OFFSHORE REFINERY


Israeli Benjamin Steinmetz, 60, is by any definition rich, with a fortune estimated by Forbes magazine at more than US$ 1 billion.

Ovidiu Țuștiu, 47, makes US$ 400 a month and is a poor engineer in Dărmănești, a small town in northern Romania.

Țuștiu and Steinmetz, one of the richest Israelis, belong to completely different worlds but both names are featured in offshore records obtained by investigative journalists. Reporters for the Organized Crime and Corruption Reporting Project (OCCRP) and RISE Romania found out that this is no coincidence.

Details about both were buried in the Panama Papers, a trove of internal data of Mossack Fonseca, a Panamanian legal firm doing business in offshore tax havens for clients who want to hide their identities and/or holdings.

The data was obtained by the German newspaper Süddeutsche Zeitung and shared by the International Consortium of Investigative Journalists with the Organized Crime and Corruption Reporting Project and more than 110 media partners from 82 countries.

Țuștiu is virtually unknown to the Romanian public, but Steinmetz received extensive coverage in Romanian media after police issued an arrest warrant last month for his alleged involvement in a corrupt land deal. He is charged along with a member of the Romanian royal family and other intermediaries.

Steinmetz is also well known because his BSG group of companies is a main stakeholder in the Roșia Montană gold mining project. The project, which planned to use cyanide leaching to exploit gold-bearing ore in the mountains of Transylvania, was halted by Romanian authorities after tens of thousands of people took to the streets in September 2013 to protest against the mine.

Steinmetz and other shareholders sued the Romanian state in a Washington, DC arbitration court and may seek billions in damages over the project being stopped.

Documents in the Panama Papers show that companies established by Steinmetz have been involved in another scandal that rocked the Romanian economy in the past decade. Known to Romanians as the RAFO scandal, this refers to the collapse of two oil refineries—named Dărmănești and RAFO Onești–in the north of the country.

The two former refineries have now been reduced to scrap metal, leaving thousands of people without jobs. The RAFO scandal involves a string of secretive offshore companies that took turns owning the refineries after a controversial privatization in the early 2000s. Some of these companies are connected to Steinmetz’s BSG group of firms.

Scrap Metal

Țuștiu worked as an oil engineer for 14 years at both the Dărmănești and RAFO refineries. “When they went bankrupt I couldn’t believe my eyes. I never lived through such an experience before. I thought I would get to retire from that job. I felt left hanging,” Țuștiu told a reporter at his current workplace in the Dărmănești city hall.

Țuștiu had to quit his job in 2008 when the refineries shut down. Since then, the oil refining equipment, pipes, and furnaces have been sold, piece by piece, as scrap metal. “There is nothing left standing here. All the jobs were lost in 2004,” said a guard who oversees what is left of the Dărmănești refinery.

However, there were indications of the disaster to come long before that. After the refineries were privatized in the early 2000s, ownership of the industrial behemoths cycled rapidly through a series of offshore companies, leaving huge debts and uncertainty behind.

The first private owner of the refinery, in the early 2000s, was Corneliu Iacobov, a politician with the Social Democrats, who hid his ownership behind a Portuguese company. Iacobov is now in jail over fraudulent businesses he conducted with the RAFO refinery. He also shows up in the Panama Papers.

In March 2009, as Iacobov was on trial for corruption and money laundering, he bought a Seychelles company called Ayalex Investments Ltd. through Mossack Fonseca. Iacobov shares ownership in this company with his sister, Gabriela Cora Nistor. Records say it was created to open bank accounts and to develop a real estate business in the United Arab Emirates.

The next to own RAFO was another controversial businessman, Marian Alexandru Iancu, nicknamed “The Elephant,” who is also in prison over fraudulent deals involving the refinery.

Iancu was a resourceful businessman. While in a police cell under pre-trial arrest in 2005, he sold the refinery to a consortium of companies represented by a Ukrainian citizen named Uri Bider. Bider was the public face of a very secretive business group and set up shop in a downtown Bucharest building that used to be owned by a now-disgraced Romanian oligarch, Puiu Popoviciu, who is himself charged with bribery and corruption in another case.

“Bider was the boss for me. I only later realized that he might have been just an administrator,” said Marin Anton, a former RAFO manager and now a member of the Romanian Parliament. “I met (Bider) first, if I remember correctly, on the 14th of February in 2005 when Iancu got arrested. He was representing Michael Cherney.”

Cherney is a controversial Russian businessman who was wanted in a number of countries for money laundering although he was pulled off the Interpol wanted list two weeks ago. Anton said that he left the refinery when the owners stopped investing money and told him to purchase old, used refining equipment from Ukraine on behalf of RAFO, explaining, “I did not want to purchase scrap metal.”

Documents in the Panama Papers show that in 2003, two years before showing up at RAFO, Bider was working for Steinmetz, the Israeli tycoon. A November 2003 board resolution authorizes BSG Resources, the same company which is now a significant shareholder in the Rosia Montana project, to form a Cyprus corporation called Raglam Overseas Ltd. and to give Bider a power of attorney to conduct business in Ukraine.

The Ukrainian deal involved negotiations over an oil terminal in Kherson with the Infox group of companies, which was controlled by the family of Mykola Zlochevsk, a former minister of the environment who fled the country after the Maidan revolution.

The same document authorizes Belgian Sandra Horemans, a close associate of Steinmetz, to represent the Raglam company. Horemans’ name is also mentioned by Romanian prosecutors in the alleged corrupt land deal case that generated last month’s arrest warrant for Steinmetz.

Anton told OCCRP that he did not know that Steinmetz’s companies have been involved at RAFO. He added he met him a couple of times but in different contexts.

By 2006, Bider had inserted Raglam in the ownership of both Romanian refineries, RAFO Onești and Dărmănești. Less than two years after taking them over, Bider left and transferred ownership to an equally secretive group of companies. During this period, Romanian authorities complained that they didn’t know who really owned the companies.

The Panama Letter

Țuștiu, like thousands of other RAFO and Dărmănești refinery employees, hung on through these changes until, in 2008, he was laid off and forced to look for other jobs. “I couldn’t find nothing. Couldn’t find. I’m applying every week to dozens of jobs,” he said.

One of the places where he applied was Mossack Fonseca. This is how his name joined those of Iacobov and Steinmetz in the same leaked database.

“I am ready to cooperate for transfer or remittance of funds for any companies, persons or banks worldwide, as a nominee account holder, based on a reasonable commission. Also, I am interested to serve as nominee director or shareholder for corporations in any jurisdiction,” Țuștiu wrote in an email to Mossack Fonseca in January 2013.

At first Țuștiu told OCCRP that he doesn’t remember applying for a job with the Panama firm but then he acknowledged it, adding that he has done nothing illegal.

He couldn’t have anyway, as Mossack Fonseca politely declined his service: “We truly appreciate your offer, however we have already selected a group of individuals for this purpose.”

SERBIA: LOCAL BUSINESSMEN SHOW IN LEAKED DATA


Serbian businessmen are well represented in the records of Mossack Fonseca, a firm based in the offshore tax haven of Panama that helps clients worldwide avoid scrutiny and taxes.

Details about their activities are buried in the Panama Papers, a trove of Mossack Fonseca’s internal data of obtained by the German newspaper Süddeutsche Zeitungand shared by the International Consortium of Investigative Journalists (ICIJ) with the Organized Crime and Corruption Reporting Project and more than 100 media partners from 76 countries.

One of those partners is KRIK.rs, an OCCRP partner based in Belgrade. Reporters from KRIK spent months poring over the Mossack Fonseca data to unearth the stories that various Serbian individuals went to a lot of trouble to conceal.

The following is a list of the major names contained in the database, with a summary of their activities. In the coming weeks KRIK will publish stories that show in greater detail just what some of these businessman were up to.

Vladimir Delić, a close business partner of Belgrade Mayor Siniša Mali, appears in the Mossack Fonseca data as the owner of several offshore companies.

In 2003, when Mali worked for Serbia’s privatization agency, he helped his father and Delić to privatize Bratstvo, a producer of railway equipment. The company eventually went bankrupt and workers lost their jobs. He was under investigation by the Serbian authorithies, but the prosecutor dropped criminal charges. Delić pledged assets of the privatized company so his Cypriot company Unibros could raise a loan of about EUR 3.7 million (US $4.1 million).

According to Mossack Fonseca records, Delić is now back in the game, establishing two companies in the United Arab Emirates (UAE) in 2014 and 2015. Through one of them he owns a Panamanian company that deals with trans-oceanic shipping.

The controversial mayor of Belgrade Siniša Mali did not use Mossack Fonseca for the firms he has previously registered but rather another offshore registar.

Journalists from KRIK, however, found that Mali worked with Mark Harrison, a representative of Mossack Fonseca in Serbia, more than ten years ago. At that time Mali worked for Agency for Privatization and Harrison was hired by the agency as a consultant in the privatization of the fuel company Beopetrol.Beopetrol was sold to Russian Lukoil, in a transaction the Anticorruption council called corrupt.

According to documents from Mossack Fonseca, KRIK’s discovery seemed to upset Harrison.

A week after KRIK published a story on Mali, he sent an email to the headquarters of Mossack Fonseca and asked about the companies in which he was director. He insisted that he be immediately answered.

Harrison notes that Mali was appointed director of offshore companies Brigham Holding & Finance Inc and Etham Invest & Finance Corp. during July and August 2011 and asked for the current status of these companies. The two companies were used to buy controversial apartments on the Bulgarian coast.

The agency responded that Siniša Mali is not their client and that they do not have access to documentation because Mali used Trident Trust Company to register his companies. The Panamanian database also shows that businessman Igor Szabo, who for the last decade has been investigated for various financial crimes, has also been using the services of Mossack Fonseca to set up webs of offshores since early 2000s.

Prosecutors say Szabo used his companies to drain money out of privatized companies. He was charged for the abuse of power in the Azotara case, and he also closely cooperated with Zoran Ćopić, who was convicted in Bosnia and Herzegovina of laundering cocaine profits for the Darko Sarić’s gang.

Mossack Fonseca agents, according to their internal email communications, knew about Szabo’s alleged involvement in crime. The Panamanian firms due-diligence department turned up an OCCRP article detailing the criminal charges facing Szabo. That was seemingly no problem for the agents, who decided to continue working with him after he provided a power of attorney to a woman employee.

Szabo told the reporters of KRIK’s that he did not own the companies established with “Mossack Fonesca,” but that he was merely a representative. He explained that they were set up to commercialize artificial fertilizers with Slovakia and South Africa, but did not have any business in Serbia.

Some big names show up in the Mossack Fonseca database, which reveals some new details about an old case from the 1990s, when dictator Slobodan Milošević and his associates used offshore companies to steal more than a billion deutsche marks from Serbia.

The newly released documents reveal that Serbian businessmen Zoran Drakulić was the attorney for a company which controlled another company through which part of the stolen money disappeared.

Vuk Hamović, a energy broker in the Balkans, cooperated with Drakulić’s in another business deal, the offshore records show.

Slobodan Anđić, an alleged close friend of Milošević, in 2012 became the director of an offshore company registered in BVI.

Businessman Vojin Lazarević also appears in the database. His Serbian company, Rudnap Group AD, established a company called Giralia Resources Limited in 2007 in the Seychelles tax haven, but it is unknown what this company does.

Srđan Šaper, a major player in Serbia’s advertising business, has been called one of Serbia’s most powerful media executives by the Blic news organization. The Mossack Fonseca documents indicate he used offshore companies to send about € 3 million out of Serbia which he earned by selling advertising space on the biggest Serbian TV channels, RTS and PINK. The database details how this was managed.

Russian interests in Serbia can be seen in financial transactions hidden behind offshores. Behind a web of companies, Serbian businessman Milan Popović formed a partnership with a Russian tycoon close to Putin, Konstantin Malofeev.

Another Russian businessman, Igor Rotenberg, used offshores to buy shares in the privatized Serbian construction company, PPT Inzinjering (Engineering).

Malofeev and Rotenberg’s father, Arkadiy Rotenberg, a close friend to Putin and the largest state contractor in Russia, are listed on the European Union (EU) sanction list. The database also contains other examples of Russians buying companies in Serbia behind offshores.

Filip Zepter, one of Serbia’s wealthiest businessmen, shows up in the database. He cooperated with Alain Bionda, a lawyer and oil trader from Switzerland. Bionda, according to a United Nations report, was involved in illegal oil transactions with Iraq. Bionda was in contact with Mossack Fonseca office to set up offshore companies for Zepter and also served as director in some Zepter companies. Zepter had companies in BVI, Panama and Cyprus.

Miodrag Kostić, a top Serbian businessman engaged in agriculture and banking, appears in the database as participating in the transfer of €368.000 (US $510,000) between two offshore companies in 2008. One of those companies held shares in AIK bank, which Kostić controls.

Predrag Lučić, who owns Serbia’s Lučić Invest and Panonka AD, also appears in the database. He founded two offshore companies, in the Seychelles, LP Line Investment and Bluering Ltd. There are no details on what these companies do. Lučić told reporters of KRIK’s that these two companies didn’t do any business. He established them with the intention to invest in Africa, but he changed his mind because Africa was not yet a safe to invest.

Pilots Slobodan Stričević and Đorđe Jovanović, who are linked to cigarette smuggling in Montenegro and Italy, in 2009 established an offshore company, DSP Jet Co Ltd. in the Seychelles. The purpose of this company is unknown. Stričević and Jovanović also own the Serbian airtaxi company Prince Aviation, which is listed in an Italian indictment as one of the companies used for transfering profits from cigarette smuggling by Italian organized crime groups with protection from Montenegrin state officials.

A second pilot in the database is Vladimir Banjac, who formerly flew for the state-owned company JAT and who performed several emergency landings and was dubbed a hero by Serbian media. Banjac and and his business partner established an offshore company named Nanoinspekt Solutions Limited in the Seychelles in November of 2014. Just few months earlier, their Belgrade-based company with the similar name won a tender, making it the only company in Serbia with a license to make sure fuel comes from a legal supplier. The database shows that the Serbian steel plant Železara Smederevo signed a contract in 2013 with a BVI company that was controlled by a group of Ukrainians who were investigated by the BVI financial agency for money laundering and suspected in Ukraine of smuggling coal.

Ljiljana Mišković, the wife of Serbian businessman Miroslav Mišković who is charged with financial crimes, in 2014 asked through a middle man Mossack Fonseca agents to establish an offshore company for her to deal with low-risk investments.

Database records indicate that Serbian fashion designer Roksanda Ilinić, whose creations are worn by US First Lady Michelle Obama and Dutchess of Cambridge Kate Middleton owned an offshore company called Greenland Property Limited, which partialy owns a company in Serbia which was used to sell computers to state agencies and later consulting.

Serbian construction engineer Zoran Florić established an offshore company called B&R Expert Company LTD in the BVI in 2010.

Also in the Mossack Fonseca files is a businessman from Jordan, Abdrabou Yousef Shaker Dahalan, who is the brother of Muhamed Dahalan, a Palestinian who holds a Serbian passport and is close to Serbia’s prime minister. Abdrabou established the offshore company, Al Yasmeen Company Limited in 2011, with his wife in the BVI to carry out asset management in the United Kingdom.

Nandi Ahuja, an Indian businessman and organizer of fancy parties in London, who does business in Serbia, also appears in the database. He is a member of the supervisory board of one of the best-know Serbian agricultural companies, the Victoria Group. The leaked docments show that he also co-owns an offshore company in the Bahamas but it is not clear what its purpose is.

Ahuja stated that his company does investments, but did not specify what and where. He added that his company has never operated in Serbia or with people from Serbia, as well as that it operates legally