The Crown Estate bought a £ 67million property in London from the family of the Azerbaijani ruler | the monarchy
The Queen’s Crown Estate has launched an internal review more a £ 67million London property that she appears to have bought from the multimillionaire ruling family of Azerbaijan – which has been repeatedly accused of bribery.
Details of the purchase are contained in Pandora documents, which reveal how a network of offshore companies linked to the family and associates of Azerbaijani President Ilham Aliyev negotiated nearly £ 400million worth of British properties over the course of over the past 15 years.
The real estate purchases include a building acquired for £ 33.5million in 2009 by an offshore company beneficially owned by President Aliyev’s son Heydar, who was only 11 at the time.
The revelations raise questions about potential loopholes in the UK’s property registration system and whether they prevent due diligence, even by a body such as the Crown Estate, nominally owned by the British monarch and managed by commissioners for the benefit of the nation’s finances.
A spokesperson for the estate, which manages £ 15 billion in real estate assets, said: ‘Prior to our purchase of [the building] we have carried out checks, including those required by UK law. At the time, we hadn’t established any reason why the transaction shouldn’t take place. In light of the potential concerns raised, we are investigating the matter. “
Aliyev has ruled Azerbaijan since taking over as president from his father in 2003 and presiding over a country frequently accused of human rights violations, rigged elections and systemic corruption.
In 2015, a European Parliament resolution called on “EU authorities to fully investigate allegations of corruption against President Aliyev and members of his family”, following a series of articles by Azerbaijani investigative journalists accusing the first family of personally benefiting from state contracts. and trade agreements.
In 2017, human rights campaign group Freedom House also criticized the country for “widespread and pervasive” corruption in a report. “As long as ruling elites continue to enrich themselves at the expense of public money, government anti-corruption measures will have limited impact,” he said.
In August 2018, the Crown Estate paid £ 66.5million for 56-60 Conduit Street, an eight-story office and retail building in London’s Mayfair, which it purchased from a British Virgin Islands-based company called Hiniz Trade & Investment.
Hiniz had acquired the building for £ 35.5million in 2009, and Pandora’s papers show how ownership of the company passed from the president’s daughter, Arzu Aliyeva, to her grandfather Arif Pashayev, who then went on to placed the company in a trust in 2015.
The leaked files do not show the source of the funds initially injected into Hiniz, but the disclosure of the company’s shareholders – and how ownership was transferred between members of the first Azerbaijani family – raises new questions as to whether the transaction should be investigated for money. – money laundering problems.
Dylan Kennedy, former UK law enforcement officer and director of financial due diligence firm Intelpool, said: indeed legitimizes the product. In this case, if the source of funds turns out to be questionable, the sale of a property to the Crown Estate is the height of legitimation.
The Crown Estate said it had received “details of the ultimate beneficial owner from Hiniz Trade and Investment Limited, but no other details of the property.”
The deal isn’t the first time the Aliyev family’s property investments in London have sparked controversy.
In 2018, the Solicitors Regulation Authority fined a London lawyer £ 45,000 for misconduct relating to the real estate investments of President Aliyev’s daughters, Leyla and Arzu Aliyeva. The court found that the lawyer had failed to exercise enhanced due diligence in a case that should have raised money laundering risks.
The UK government has repeatedly vowed to introduce a mandatory register of foreign owners of real estate in the country, fearing that large swaths of real estate could be secretly held by owners who hide behind shell companies in tax havens. .
Pandora Diaries removed some of that invisibility, revealing for the first time how, between 2006 and 2017, the Aliyevs and his associates spent £ 389million to secretly acquire 27 properties using an offshore company network. Twelve of those properties have since sold for a combined total of £ 374million.
Properties that the documents show offshore companies linked to Aliyev still own include: a house in an exclusive new development in Kensington, where the houses are advertised with features such as a swimming pool, hot tub and gym / cinema , and which land register records indicate was purchased for £ 29.3million in 2012; and three apartments in an exclusive Knightsbridge building just yards from Harrods and Hyde Park department store, which were acquired for around £ 5million in 2006.
The Aliyev family did not respond to efforts to contact them.