Magisterial inquiry report into Egrant allegations: payments made between September 2015 and March 2016, but no evidence found linking transfers to Egrant or the Muscats
The daughters of Azerbaijan’s dictator Ilham Aliyev transferred €14.9 million from their bank account in the now-shuttered Pilatus Bank, to a Dubai-based company Palma Consulting DMCC, in three separate transactions between September 2015 and March 2016.
The transfers were made from the account of Sahra FZCO, which held four accounts in Pilatus bank.
The company is jointly owned by Arzu and Leyla Aliyeva, daughters of Ilham Aliyev.
Sahra FZCO is a UAE-based holding company set up to hold the real estate assets of its beneficial owners, with the Sofitel Dubai Palm Resort and Spa and Yassat Gloria Hotel Apartments listed as the source of the company’s wealth.
The details emerge from a magisterial inquiry launched into allegations by journalist Daphne Caruana Galizia, who claimed a $1 million transaction from a Pilatus account held by ‘Al Sahra FZCO’ belonging to Leyla Aliyeva, was made to Egrant Inc, a secret Panamanian company that had been set up together with two other offshore companies owned by the prime minister’s former chief of staff Keith Schembri and former energy minister Konrad Mizzi.
But while finding evidence of significant bank transfers from Sahra FZCO to another Dubai company, the magisterial inquiry found no evidence of any such transfer to either Egrant, which had no bank account, or any company owned by Michelle Muscat.
“There are clearly very substantial transfers taking place between the Pilatus Bank Account of Sahra FZCO in Malta to Dubai in the relevant period stated in DCG’s assertions. We do not however have any evidence linking the recipient of funds in Dubai (Palma Management Consulting DMCC) to any onward payments to Michelle Muscat or to a company called Egrant,” said Harbinson forensic accountants, who analysed the data seized from the bank and Nexia’s servers.
The Pilatus data contained many files relating to the daughters of the Azeri dictator and the sons of his minister for emergency situations, Kamaladdin Heydarov, and their business networks, agents, transactions and their methods of operations.
Sahra FZCO is owned by Ilham Aliyev’s daughters and had four accounts at Pilatus Bank. A very high value of transactions reached the amount of AED 87,670,389 (€21.4 million) between September 2015 and March 2016, with a substantial value of transfers made to various Dubai companies, including Palma Management Consulting DMCC.
The ownership of Palma was not clearly identified in the inquiry although it is described as being closely linked to Robert Baker, a main signatory of Aliyeva’s Pilatus account and Thamer Aidi, the husband of the other signatory, banker Farnoush Farsiar.
No Egrant connection
The inquiry found no single payment of $1.017 million at any time or any such payment to a company called ‘Egrant’.
But the inquiry lists three significant transfers: the first on 4 September 2015, transferring €14.2m from a newly opened AED account at Pilatus, to Palma in Dubai; on 7 December 2015, €226,796 to Palma, and on 18 January 2016, a further €560,482 to Palma. These transactions are the only US dollar transactions in the Sahra FZCO bank statement within the period of the assertions made by Caruana Galizia (up to March 2016).
The report does not exclude the possibility that the money was later transferred to another company in Dubai possibly owned by Muscat. “One possibility for a transfer taking place in March 2016 would be if the payments which Sahra FZCO made to Palma Management Consulting DMCC were in turn used to make payments from Palma’s Dubai bank account to a separate Dubai based account set up by Egrant or to a company whose beneficiary could be Muscat. If Palma Management Consulting DMCC were conduits for such transfers we have no means of tracing the onward recipients of the transfers made by Palma in Dubai to third parties.”
With reference to the $624,058 (€560,482) payment, Harbinson insists that it was transferred to a Dubai account in Palma’s name. “This could of course cover several online transfers of €100,000 to Egrant.”
But the inquiry also concluded that Egrant never had never opened an account with Pilatus.
One interesting detail which suggests confusion in the information conveyed by whistleblower Maria Efimova is that Shams Al Sahra, a company owned by the Heydarovs, had the account number 101731, which matches the amount of money alleged by Caruana Galizia to have been transferred by Aliyeva to Muscat. “This may or not may be a coincidence,” the report says.
Sahra FZCO and Shams Al Sahra are closely linked, with both owning property in Emirates Hills First. The authorised signatories for their Pilatus account were Robert Baker and Farnoush Farsiar. Shams Al Sahra FZCO is owned by Tale and Nijat Heydarov. Palma Management Consulting also issues relatively large invoices, for example $200,000 to the Aliyeva/Heydorov companies for administration fees.
Malta and Azerbaijan
While finding no evidence linking Muscat to the Aliyevs, the magisterial inquiry confirms that the Azeri ruling elite regularly used Pilatus Bank for the transfer of large amounts of money.
Malta is linked to Azerbaijan through SOCAR, the Azeri state-owned company which is part of the Electrogas consortium running the LNG power station. The company buys the gas from Shell to sell it to the same consortium in which it forms part in what has been described as an “unusual arrangement” by energy expert Simon Pirani. Muscat had direct talks with the Ilham Aliyev in a visit to Baku in December 2014, during which a memorandum of understanding on energy cooperation between the two countries was signed.
Leyla Aliyeva, who runs the Heydar Aliyev Foundation, was hosted by the Prime Minister’s wife Michelle at Girgenti Palace in February 2014.
Aliyev has been accused of presiding over a regime that has imprisoned journalists, committed human rights abuses and allowed looting of state assets by public officials. The Organisation for Economic Co-operation and Development has repeatedly called for the country to be more open and provide greater transparency as part of necessary anti-corruption measures.
By James Debono