BY EYNULLA FATULLAYEV, DUBAI
A year passed since the publication of the Report on Azerbaijan’s oil industry by Global Witness. We paid some attention to this Report in our previous publications.
During this period we tried several times to approach Mr Anar Aliyev (Anar Alizade), a person whose name was keyword in the referred Report, to give us an interview. Despite the initial reject of our requests we were able to convince Mr Alizade two months ago to give us this interview, which we believe would be very interesting for you.
Q. The scandalous report ‘Azerbaijan anonymous’ published by Global Witness about you is still the subject of discussions and rumours; and it raised a number of questions with respect to a transparency of SOCAR activities, the company which is one of the leading oil brands in the world. How did you set up a partnership with SOCAR, which was not known to the public before the publication of the aforementioned report? Is the family relation factor present in this case allowing you to benefit?
A. As was mentioned by me several times before, neither the Azerbaijani society nor I have any doubts about the biased position of Global Witness. It is well known that the report was published in 2013 right before the signing ceremony of major energy project’s launch, which are quite important in the light of current geopolitical situation in the world. However, even if it is obvious that Azerbaijan is the main target of the report it is still not clear for me, why precisely I was chosen as the main subject of discussions. Taking this opportunity, I would like to stress once again all my previous statements made in my personal statement and follow-up interviews on biased, contradictory and groundless nature of the report.
If we refer to the position of Global Witness, we can see that they never brought any corruption allegations against me and it was further confirmed in their separate statements and interviews. In the meantime, since their report is fully based on publicly available information, since SOCAR’s and my statements have brought much clarity into all these issues and since I am currently known to the public, it can be claimed that all matters of transparency and the lack of publicity in my case have been addressed in full. In this case, the attempts to further raise additional questions and blow these matters are nothing, but a clear indication of their biased approach towards me. ( link )
It clearly shows that all allegations made in the report are contradictory and groundless. I believe for these reasons they are trying to accuse me at least of something (with irony: ‘they even do not know of what exactly’).
As it concerns the question of family relations, I have clarified this issue in my personal statement and follow-up interviews. I have no intentions to return to this matter again. Coming to the issue of my business partnership with SOCAR, I can only state that our cooperation is based on mutual benefit and trustworthy collaboration.
Q. There is some controversial information about you in the local Azerbaijani information resources. Some claim that you are a relative of SOCAR President Rovnag Abdullayev and all your achievements were possible due to his great support, others contend that you are a talented and successful young businessman supported by SOCAR. As far as we understood Global Witness emphasises on the first issue of family relations. Could you please clarify this?
A. I have no intention to return to this issue again. I have addressed this issue in my personal statement and the follow up interview to Business Time.
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This organisation simply was not able to demonstrate my family relations with any powerful officials, and for these reasons, they now raise questions on ‘any other forms of family relations.’ As to discussion of my family members, I believe that it is beyond the ethics and it should be treated as serious interference in my private life.
As to you question, I can confirm that it is true that I am a young and successful businessman and a reliable partner for SOCAR.
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(Ed.: In our previous publications we made a mistake and without verification of verbal information got from our sources made statements about some family relations of Mr Alizade.
However, our journalist investigation undertaken within the last two months did undermine this statement and our interviewee produced an official acknowledgement from the competent authorities on the lack of any family relations to any high officials in Azerbaijan. We eye witnessed this official certificate)
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Q. The report indicates that until 2012 you were one of the founders and shareholders of SOCAR Trading, one of the top companies dealing with trading in crude oil. Was there any necessity in such a company, given that SOCAR itself always had an opportunity to employ professional experts and sell its crude? What was the benefit for Azerbaijan from such a business partnership?
A. I do believe that when our common friend, a well-known international businessman, introduced Mr Valery Golovushkin to me in 2006 in Istanbul, it was a benchmark for future SOCAR Trading successful story. I believe there is no need to go back again into the history of SOCAR Trading creation, since it has been addressed in my previous interviews and statements. I do not want to comment much on this, but I do believe that independent reports produced by well-known international experts such as Wood Mackenzie and Boston Consulting Group are the best responses addressing such question. They are available at the company’s official website.
From the said reports of BCG and Wood Mackenzie it can be seen that due to the set up of SOCAR Trading and its effective marketing strategy in 2008-2013 Azerbaijan benefited from $1.7-1.8 billion profit and which led to increase of ‘Azeri Light’ premium. Moreover, SOCAR Trading has brought an additional $500 mln profit to Azerbaijan from the third parties trading and transit through BTC pipeline.
I urge you to research and carefully read the said reports as professional independent journalists. I do believe it may bring clarity on most issues.
Their main provocative argument is that I earned hundreds of millions of dollars only investing $5 mln into SOCAR Trading. However, I would like to bring to your attention that, if in 2007 I invested $5 mln into the unknown company with unpredicted future, which lacked any financing sources, on my own risks, later in 2012 I sold the shares in internationally renowned oil trading brand. As I mentioned several times before I did provide financial support to SOCAR Trading during its difficult times. Today, I can state with certain amount of confidence that without my support this company would not have good chances to survive in the light of difficult financial challenges.
A well-known international evaluation company clearly defined that the market price of my shares in SOCAR Trading as of 30 June 2012 was much higher than the sale price. I do believe that it addresses the previous provocative question.
I always ask the same question ‘whether the same could happen to someone else, who is of different nationality, let’s say from Western Europe, and whether the same attitude would have been taken against him?’ I believe that it is worthy in this case to refer double standards issues.
Q. When you talk about SOCAR Trading a reasonable question arises, whether you had any experience in oil trading before?
A. This question was addressed to me before. However, I personally believe that it is groundless and illogic. First of all, I’d like to mention that before setting up SOCAR Trading I possessed an unrivalled experience in general trading of oil and gas equipment and some products as well as in trading of various goods. Moreover, I did possess a good experience in successful setting up of major businesses in foreign jurisdictions.
Last, but not least, it can be referred to numerous examples when certain people without a great experience in specific fields had considerable success. Is there any wrongdoing? Simply using responsible, right and initiative approach, I did succeed with SOCAR Trading case, because my main activities were to bring forward an offer on setting up of this company, its realization and providing necessary financial support.
In fact, I initially achieved substantial positive results and success in commerce in non-oil sector. Today the major part of my business and profit still constitutes the non-oil sector. I successfully implemented major non-oil sector projects in Azerbaijan and abroad. Indeed, I came from non-oil sector to some fields of the oil sector. However, for some reasons it was never mentioned anywhere…
Q. There are certain rumors about certain persons standing behind this Report. What do you think about this?
A. It can be argued that the position taken by Global Witness clearly shows that this organisation targets not only me, but Azerbaijan in general.
It is interesting that Global Witness is hiding its sponsors and ‘customers’ and does not disclose in full their list. It is clearly indicated at the website of this organisation (http://new.globalwitness.org/support-who.php). In this case a reasonable question arises why the organisation pursuing the goals of global fighting for transparency is hiding its sponsors and ‘customers’!? Don’t you think that in the matter transparency they should start from themselves? Don’t you think that in the lack of such transparency it is unknown whether the Armenians or the Armenian lobby or any other forces hostile to Azerbaijan stand behind such campaigns against me and Azerbaijan or not!?
Moreover, I urge you to pay attention to the financial statements of Global Witness. You can see explicitly in the statements that this organisation is not simply pursuing its usual activities, but it mostly dedicates its activities to ‘special tasks’ for which it gets most of its financings. In other words, their day-to-day activities would not allow them to finance the preparation of such reports. Therefore, it can be assumed that the report, which was prepared against Azerbaijan, was sponsored and financed by such ‘customers’.
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(Ed.: We have witnessed this fact when Global Witness financial statements were reviewed, which we got from their official website. The names of some of the sponsors are not disclosed and the others are well-known companies and organizations. Most of these names disclosed at the website are known as the ones who always took hostile position against Azerbaijan. You can personally check it at
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Q. Did you face any competition by other oil trading companies when you were one of the managers of SOCAR Trading? We believe such a competition to be quite natural in a situation, when a company suddenly and aggressively enters into oil trading market and takes over a sale of substantial volumes of Azerbaijani crude oil…
A. As I already stated several times before, I was never involved in management of the company, and I did not interfere into its activities, and my role in SOCAR Trading was limited to a passive shareholding.
Moreover, SOCAR Trading did not appear suddenly on the market. Its set up, activities and achieved results were the outcome of long-term planned strategy led by such professionals as Mr Valery Golovushkin. If you refer to the reports of independent international consulting companies, which I mentioned earlier, you can clearly see the benefit and profit, which Azerbaijan gets from setting up SOCAR Trading.
In the meantime, I must accept your argument that our achievements with SOCAR Trading could indeed be a reason for jealousy and concerns for major oil companies. I believe that as in all fields there is a competition in oil trading business and SOCAR Trading faces such competition in its day-to-day activities.
Q. Were SOCAR Trading activities subject to audit conducted by international audit companies? If yes what were the results?
A. Yes, it is an absolute must and it falls under the regulations of Swiss laws. The company complied with all requirements on providing audited financial statements to the relevant state authorities of Switzerland since its establishment, and it always complied with its tax obligations.
In brief, I can confirm that such audits by top international audit companies never revealed any illegal activities, tax issues, corruption matters or any wrongdoings whatsoever in SOCAR Trading.
Q. As far as we know, you also invited Wood Mackenzie to conduct SOCAR Trading’s audit…
A. Not indeed. It was done by SOCAR itself some time after I left the company as one of the shareholders. The purpose of such audit was to learn about the outcome and benefits of the company’s establishment. As far as I know, the report produced by Wood Mackenzie provides a detailed analysis on positive outcome of creation of Azerbaijani oil trading company and profit brought by it to Azerbaijan.
Q. Although there is no direct corruption accusations in the Global Witness report, it stresses a serious problem with the lack of transparency in this case. Azerbaijan was among the first countries joining the EITI. However, now this report refers to serious problems with oil sector transparency in Azerbaijan. It was revealed that Anar Aliyev as a long-term partner for SOCAR was not known to the public including most of NGOs who joined the EITI. Why there was no information known to the public about your business partnership with SOCAR?
A. All these claims and accusations are groundless. Indeed, I never hid from the public. For instance, if you simply typed my name in any Internet search systems you could find my name among the members of SOCAR Trading’s Board of Directors since its establishment in 2007. This information was always publicly available and was never hidden. Moreover, this information was placed and always available at SOCAR’s corporate website. Could be there more transparency?
As to why I was not known to the public, I may state that there were certain reasons for this. One of the main reasons was the privacy issue and protection of my private and comfortable life and that of my family from interference of the media. It is well known now that after the report’s publication there is a serious issue with the interference in my private life and business activities by various media representatives.
My negative public image has been formed with an active support of some local and foreign media. In its own turn, it threatens my and my family’s security. Although we feel safe in Azerbaijan, we are concerned with such negative ‘popularity’ of ‘unofficial millionaire’ created by Global Witness and some media, which may potentially attract the attention of certain criminals. Undoubtedly, it a considerable threat to my and my family’s security abroad. Moreover, due to my personal character I was always trying to avoid publicity and popularity. As you can see, it is actively used against me now.
The most interesting thing is that they blame me for wrongdoings that are not even known to them. Do you think that an avoidance of publicity and active self-advertisement means lack of transparency or mysterious hiding? Is any of this can be treated as a serious offence? I believe it would be right to start from their own case and disclose all details and information about their sponsors and ‘customers’ to the public before groundless blaming of others in a lack of transparency.
Q. As is indicated in the report and confirmed by you in your statements, you sold your shares in SOCAR Trading to SOCAR, and now you state that you are not involved in the sale of Azerbaijani crude? How could you comment on this?
A. Yes, I confirm that currently I do not own any shares in SOCAR Trading. The shares, which belonged to me before, were sold to SOCAR for much lesser value than the market price. Such price discrepancy has been already confirmed by independent international evaluation and audit companies. However, the share purchase agreement on SOCAR Trading was signed and entered into in 2012, and SOCAR agreed to pay their full value, but the full payment of the shares has not taken place yet.
Q. Another foreign company, which was granted a right to sell Azerbaijani crude, was Sumato Energy. Do you have any connection to this company? For instance, it is argued that your two days stay at a hotel in Geneva was paid by Sumato’s representative…
A. Use of such false and provocative information and its active spreading in negative manner pursues certain goals. They are simply trying to use such negative information in order to attract more attention to this case.
As for my stay in Geneva and payment of my hotel fees, I would like to draw your attention to the fact that it was clearly indicated in the report that all such information had been got from sources provided by well-known hackers group. Moreover, it is generally believed that the instruction to place such contradictory and false information on the Internet was given to hackers by special security services of a hostile country. There should be no doubts about the groundless and illegal nature of such documents.
Q. What about UGE-Lancer, another unknown company. In 2011 SOCAR produced the PSA on Balakhani-Sabunchu-Ramani and Kurdakhani oil fields to the Parliament and introduced UGE-Lancer as a foreign company. However, the report indicates that this company is related to you. How was your company chosen for this project?
A. There is nothing strange, the referred company is really a foreign company set up abroad, and it belongs to my Group of Companies. It was logic to introduce it as a foreign company.
I would like to draw your attention to the fact that foreign companies are mainly interested in major offshore oil fields in the Azerbaijani sector of the Caspian Sea. Most of these oil fields are new and contain rich oil and gas deposits. In contrast, most of onshore oil fields are old exhausted ones inherited from Soviet times. All of them have collapsed infrastructure and overloaded with heavy social programs. Therefore, such oil fields were not commercially attractive to most of foreign investors.
As it was mentioned the PSA practice in Azerbaijan is based on requests and negotiations process. Conduct of tenders for these purposes is not provided under Azerbaijani legislation.
Our request was accepted by SOCAR as an interesting offer. You can witness now how right such decision was. Due to successful activities of my company, oil production at this oil field increased almost twice and I am fulfilling my obligations as the investor. Today you can compare the effective infrastructure and work conditions of my employees. In contrast to other similar onshore oil fields, the built infrastructure and work conditions at my sites are much better. I urge you to look at the comparative pictures ‘before’ and ‘now’ placed at my holding company’s corporate website.
Moreover, there was no massive scale staff cut since the period we took over the referred oil fields. In contrast, we employed many new employees. You cannot find any similar effective management at any other onshore oil projects including those operated and managed by major foreign oil companies.
I would like to bring to you attention another important thing related to this oil field. My company is even fulfilling its obligations under certain social programs. In the nearest future 18 families among our employees will receive apartments. We are planning to provide accommodation to 300 more families. There is a massive on-going construction at the moment. I would like also to draw your attention to the fact that all funds allocated for these social programs are deducted from my net personal income.
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(Ed.: It is quite important fact to be mentioned that our interviewee is allocating the funds for social programs from his net personal income. In contrast with the others, he is not using the company’s profit for these purposes…
We have also visited the sites of the referred oil fields and became eyewitnesses to what was stated by Anar Alizade about all that had been undertaken there. In fact, we were satisfied with everything we saw there, starting from the working conditions to employees uniforms… When we saw it, we decided that it was absolutely necessary to comment on this. Moreover, these positive facts have been also mentioned in the reports of some independent NGOs.)
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Don’t you think that our achievements are solid evidences of SOCAR decision’s correctness to award us the referred oil fields? I do believe that only time and achieved results are the best responses to any questions. In my opinion, there is a positive answer to the raised question.
Q. Do you have any connection with SOCAR Petroleum, a company that is now among the top leaders of petrol stations services market in Azerbaijan? Are you represented in this company now?
A. Yes, I was one of the founders and shareholders of this company. We got the offer on participation at this project directly from SOCAR. The main reason for my selection was my ability to attract young professional local employees paying them competitive salaries and provide necessary financial assistance when needed. Moreover, A.P. International which owned certain assets and infrastructure in Azerbaijan, was important for SOCAR to successfully implement its project referred as ‘SOCAR Petroleum’.
Upon establishment of this company, our group believed that it would be successful and profitable. From our side we transferred all the assets from A.P. International to SOCAR Petroleum and huge investments were contributed to this company, which allowed it to build new chains of petrol stations. No dividends were paid to me throughout the company’s activities and my shareholding period.
However, in spring 2013 we got and offer from SOCAR to buy my shares in SOCAR Petroleum. After certain negotiations I decided to sell my shares and without taking into account investments and assets contributed by me within 7 years I was offered to sell the shares for their real balance value. Although there was an independent evaluation and the shares’ value was much higher than the proposed sale price, I accepted the offer…
In the meantime, please note that upon completion of shares sale process, fuel prices were substantially increased in Azerbaijan, which led to the dramatic increase of SOCAR Petroleum’s profit and the value of my shares sold to SOCAR.
Q. Global Witness claims that you are represented or shareholding in at least 48 various projects with SOCAR. How can you comment on such complicated business partnership? Can you please clarify, how did you get such opportunity to partner with SOCAR? Were there any tenders conducted in this regard?
A. This is inaccurate information, and I have already clarified this issue in my personal statement and follow-up interview to Business Time magazine. I never partnered SOCAR in such huge number of projects or joint ventures. Currently, the number of our joint projects with SOCAR does not exceed seven, and all of them are disclosed at SOCAR’s corporate website. The most interesting is that they paid such huge attention to the number of projects with SOCAR, but they never mentioned anything about a huge number of the projects, which I withdrew because they were not commercially attractive for us. For example, they didn’t mention anything about the projects in Georgia, Romania and Turkey, which I quit for the same reasons. Please note, that I had quit some of these projects a long time before the report was published. I even engaged independent lawyers to represent my interests in the process of leaving those companies, since these processes were complicated and time consuming.
Today, I am asked whether I have left those companies or not. I do believe that such requests should not be addressed to me, but directly to their sole shareholder SOCAR. Moreover, such information can be easily obtained from the audited annual financial statements of SOCAR available to the public at its corporate website.
The main purposes of Global Witness’ report in referring to such huge number of the joint projects with SOCAR was nothing, but just to attract more attention to this matter and make it a scandalous subject for further active discussions. Possibly, they had an intention to affect my relations with SOCAR as well. No doubts, that by doing so they did understand that such strategy would allow them to create my negative image in the Azerbaijani society.
Global Witness always asks me the same question, whether SOCAR was required to or conducted any tender procedures for my selection as a business partner. As a response to this question, I can state in brief that in most fields there is no requirement to conduct a public tender. I am sure, the said organization is well aware of these requirements. For instance, the process of awarding and signing of the product sharing agreements (PSA) with SOCAR is based on direct request and negotiations procedures and it applied to all existing PSAs in Azerbaijan. Moreover, as you can see these people do not even attempt to request a professional legal advice on this issue from Azerbaijani qualified lawyers. They often ask me, why SOCAR partnered me without any tenders. However, they never reviewed or referred to Azerbaijani laws or SOCAR’s procurement procedures. Please note, that Azerbaijani legislation does not provide a requirement to conduct a tender or any other public selection procedure for partnering in joint ventures. As you can see, they do not give a preference to the letter of law, but to false and invented arguments and facts. Undoubtedly, it must be treated as an indicator of their biased position.
In the meantime, why this question should be addressed to me!? I believe it should be addressed directly to SOCAR.
Q. You declared that you were going to sue this organization. Are you still intending to do so? If yes, could you please tell us, when?
A. As I declared before, an international team of lawyers, finance and audit experts is hired by me for this case. The notice that I reserve my right to sue for libel has been already submitted to Global Witness by my lawyers. Please note that my lawyers will make a decision on whether to start the proceedings and when they will take place.
In the meantime, I would like to stress that the said organization emphasizes in its statements and separate interviews that they never accused me of any illegal activities.
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(Ed.: Indeed, what does it mean? Does it mean that Global Witness stepped back due to its unsupported position and ill grounded arguments!?)
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Q. Perhaps as an experienced businessman you are aware that for the last couple of years there is a trend in global business under which the use of offshore structures at certain extent is considered as corruption. The issue of substantial funds hidden in offshore zones started attracting more and more attention after the global financial crisis. Under such circumstances, how did you build your complex business partnership with SOCAR and what preferences did you get from using such difficult offshore mechanisms?
A. You are not quite accurate in stating this. I never used any classic offshore structures in my business relations with SOCAR. Moreover, my holding group’s top parent company was set up in one of the most transparent and respectable jurisdictions in the world. Straight after Singapore company’s incorporation I registered its representative office in Azerbaijan and declared its existence to the Azerbaijani authorities. In the meantime, the profit generated by this group of companies were properly declared and relevant income taxes were paid by me in Azerbaijan.
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(Ed.: Our interviewee produced shocking documents concerning this matter, and we saw that he had declared his profit generated abroad and paid extremely huge taxes to Azerbaijani State Budget. We eye witnessed this, and we should have mentioned that it is a rare case for Azerbaijan…)
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In other words, we never used offshore structures for the purposes of tax evasion, hiding something or committing any crimes. There are many reasons why I established foreign companies for specific business purposes. For instance, the setup of such foreign companies gave us a chance to establish effective business relationships with our foreign counter partners. If we operated strictly within Azerbaijani companies context, we could definitely face many restrictions (foreign currency regime, import and export issues, special permits/licences, etc.)
Moreover, the use of such foreign companies allowed us to get an access to most of effectively operating banks, since those banks are reluctant to open accounts for Azerbaijani entities.
However, despite using foreign companies, as I mentioned before, most of my income is used for the purposes of reinvesting into Azerbaijani non-oil sectors. All these give me an opportunity to create new jobs and pay substantial amounts of taxes to the state budget.
As you can see, there are no negative grounds to talk about by business activities.
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(Ed.: Indeed, if this person had an intention to hide anything, why then he declared his overseas company structures in Azerbaijan and paid huge taxes? In fact, we are confused with such questions. In the meantime, it gives us more comfort to believe that our interviewee’s position is well-grounded and reasonable)
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Q. What can you tell about ‘White City’ project? On what grounds are you participating in this project and how was your company selected for it?
A. Azerbaijan officially launched the White City project in 2009 by a special Presidential Decree (http://www.bakuwhitecity.com/). The promo materials were actively circulated all around the world as well as in Azerbaijan. Since the project looks quite attractive and, as I always declared, my main goal at all times was to re-invest my income in Azerbaijan, we have expressed our interest to the project’s management. Since the project is open for all local and foreign investors our offer was welcomed by the project’s management team. As you probably know the White City Project is a fixed design project and investors are offered to contribute and develop certain parts of this projects based on the General Construction Plan. Such offers are made based on investors’ financial capacity and ability to fulfil their obligations. Based on such criteria, we were offered and we chose the project on construction of an office building. For these reasons, without hiding anything under the sole ownership of my group’s top parent company we set up a local company. The process of investors’ invitation and joining the White City Project is transparent as per the information provided at the website.
Indeed, if I had any intention to hide my involvement in the project, I would never involve my parent company and hidden offshore structures could be used instead.
Q. Everything sounds quite reasonable in terms of what you said to other media sources: ‘After collapse of the Soviet Union when the borders with Turkey were opened I was actively involved in import of Turkish textile and food products … At the same time, I was active in car import business.’ As far as we understood, you were 12-14 years old, weren’t you? We believe it impossible to be engaged in successful business, when you are of such age. Could you please clarify this issue?
A. Either your question is provocative or you experience certain problems with simple arithmetic calculations. For your information, I am currently 37 years old. The referred citation from my interview is a general description clarifying that after the collapse of the USSR and opening borders with Turkey people in my country including myself benefited from such advantageous business relationship. As to me, I started my business activities in Turkish direction in late 1990-s and at that time I was over 20. I do understand that some people accept my success in my young age as impossible. However, it is true and proven by all my current and subsequent achievements. Sometimes, I have a feeling that some forces are not happy with my achievements, and for these reasons, they produce such provocative statements against me.
Q. You also stated that after moving to Baku in early 2000-s you entered into an active real estate sale business in Ganjlik, one of the most prestigious districts of Baku. At that time, you were a little over 20. Don’t you think that in order to be successful in such business you need to have a good support, particularly in Azerbaijan? We can admit that easy money was available in 1990s, but starting from 2000-s…
A. Indeed, it was possible and I did it. One of the main reasons for my success was the support of my family. My family had a transport carrier business using Nakhichevan-Turkey route and the income generated from such activities greatly assisted me to launch and successfully run the real estate business in Baku. This took place without anyone’s assistance or interference.
I believe that my non-public profile and the effective use of proceeds generated as a result of my business activities are among the key factors allowing me to succeed. In fact, I can refer to many other similar cases when the others succeeded without anyone’s support and assistance. However, as result of unreasonable interference by media, which sometimes use the dirty methods to damage the reputation, such people prefer to avoid any communication with the media. I believe nobody would agree if the media would start doubting his achievements, since it could also harm his businesses. In other words, this is one of the main reasons why younger generation prefers to avoid any communication with the media.
Q. You state that you have achieved everything personally without any support. How then can you explain that the money generating oil businesses started their development since Mr Rovnag Abdullayev was appointed to his current office in 2007?
A. It is not accurate information and the main purpose of such campaign is to again damage my reputation. I was never employee of SOCAR and did not hold any high level position there. I started my cooperation with SOCAR in 2000-s, before Mr Rovnag Abdullayev was appointed. Starting from that time SOCAR accepted me as a reliable partner. In the meantime, our cooperation with SOCAR was developing also after Mr Abdullayev’s appointment. I believe that such statement is nothing, but a dirty PR campaign against me.
Q. In your interview to Business Time magazine you mentioned that Azerbaijan was under a pressure when SOCAR was selling crude through foreign companies. Sorry, but if you were talking about trading companies, then what political pressure could they exert on Azerbaijan? We believe that such companies actually approach oil countries with a cooperation request. Are you aware of any facts when foreign trading companies used certain pressure mechanisms against Azerbaijan?
A. In fact, what you have just said is far beyond the reality. It is a true statement and Azerbaijan did face such a situation. During certain historic moments, all those companies united their efforts and managed through a single center to put a pressure on Azerbaijan through agreeing not to buy Azerbaijani crude. As a result, Azerbaijan had huge volumes of crude unsold and it negatively affected its economy. Through such a scenario, they achieved to get good conditions for the sale of Azerbaijani crude. In the meantime, they used it to prevent Azerbaijan to become one of the independent energy providers. If you research a bit on this matter, you can find a lot of interesting information.
Another interesting fact related to this matter is that Azerbaijan did approach major oil companies with a request to set up a joint trading company. However, none of them expressed an interest in this offer. Did you ask yourself, why?! It raises many other questions. However, I believe that the answer to all these questions is straightforward. It is undeniable fact that foreign companies never wished to control such trading company on equal basis with SOCAR and share the generated income with the latter. As for SOCAR Trading, today you can see how successful was the decision on its set up. Indeed, I am proud that I was participating in creation of such powerful oil-trading arm for Azerbaijan.
Q. Do you plan any actions to end this transparency issue after publication of Global Witness Report? You managed to get rid of the ‘Mysterious man’ reputation through your statement and follow-up interviews. What about Global Witness, the civil society organizations or EITI? Are you planning to cooperate with them?
A. As I stated before I never was hiding. I always was law-abiding citizen and paid my taxes over my income in Azerbaijan and abroad. My holding group was set up in Singapore, one of the most transparent jurisdictions in the world and it does comply with all the requirements on transparency. The representative office of the holding’s top parent company established its representative office in Azerbaijan and the entire structure was declared in Azerbaijan. With certain amount of confidence, I can state that the transparent business model that I built is one of the first and a unique one for Azerbaijan. I am proud of this…
I do not see any necessity to cooperate with the referred organization. Since their biased position is so obvious that I have no doubts about a chance to be fairly and objectively treated by them. For instance, let’s take Global Witness; they never provided links of or placed my statements or interviews on their website. Can you see any fair and objective approach there? Let’s take my first interview to Business Time magazine which was given originally by BT in two languages (Azerbaijani and English) and was provided to Global Witness by my lawyers. However, they provided only the Russian version of this interview, which is a simple translation for some Russian speaking audience. This organization never referred to any information from my personal website. They call themselves a strong, objective, fair and transparent organization, which is able to provide deep and thorough researches, but in the given case it shows again their biased position towards my case and that of Azerbaijan.
However, I shall continue providing information about my activities to the public. We will use my personal website and social networks. As before I am always open for discussions with neutral and unbiased media resources.
Q. As mentioned in the report and also confirmed by you as being true, you sold your shares in SOCAR Trading and currently you have no any relation to the sale of Azerbaijani crude at all. Could you please then clarify the situation with your claimed 50% ownership in SOCAR International DMCC? It is currently claimed that this offshore structure, where you have half of the shares, is selling crude…
A. I can confirm that currently I do not own any shares in SOCAR Trading and as I stated several times before I was never directly involved in the crude sale process and my role was always limited to ‘passive shareholding.’ Once again I would like to stress that only SOCAR has a power in Azerbaijan to sell crude on behalf of the State.
As for SOCAR International DMCC, I am not a shareholder of this company at the moment. It can be easily checked and verified through submission of the relevant requests to specific companies’ registry in the jurisdiction, where the company is incorporated. Moreover, you can get this information from SOCAR’s corporate website and it was always available at their audited financial statements.
I believe that it is worthy if SOCAR addresses the question on why this company was established and what was the rationale behind it. In the meantime, I can briefly comment on a necessity of setting up such company.
After creation of SOCAR Trading together with SOCAR it was decided that such successful experience should be used also in the UAE and it could be beneficial to have another subsidiary under SOCAR brand. The main goal for establishment of this company was to expand SOCAR’s activities to the Middle East region. SOCAR International DMCC was set up just a couple months before completion of the first stage of Fujairah Terminal. This Terminal was a joint project of SOCAR with the local partners and it was designated for the development of Middle East trading business.
The main reason of my selection as a partner to SOCAR in SOCAR International DMCC was my strong presence in the UAE, set up offices, professional team and already existing business network and contacts.
While I was a shareholder, the company declared dividends, 90% of which I didn’t take, but reinvested into the company for the purpose of its further development and growth. It allowed the company to purchase new terminals and facilities. Along with SOCAR Trading, I was offered to sell my shares in SOCAR International DMCC. After certain negotiations and proposals from SOCAR, the full dividends were paid, but we agreed terms that my company was to be paid for its interests at book value in the amount of AZN 18 mln, which was much less than the market value. No my previous expenses or investments amount were taken into account upon the purchase of the shares.*
* Note: After publication of this interview we have been approached by Mr Alizade who requested us to correct the text which we published inaccurately as misunderstanding of the provided facts.
Q. There is still ongoing scandal over Bahar Energy oil company. Massive staff reduction and non-payment of salaries are the main issues for Bahar Energy today. As far as we know, you were among the shareholders. How can you comment on this?
A. My company was one of the three shareholders who set up Bahar Energy. However, since this project was not commercially attractive for us and in order not to repeat the experience with previous similarly unsuccessful projects, we decided to sell our shares to Baghlan Group, the shareholder who had a controlling stake in Bahar Energy and was responsible for the overall management. Information about this transaction was publicly available and can be found in numerous Internet resources.
Despite the execution of the share purchase agreement and transfer of the shares to Baghlan Group in 2012, we were not paid the value of the shares. Although a long discussion took place with Baghlan Group through our lawyers, no effect was achieved.
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(Ed.: We have been provided with all the necessary documents confirming the interviewee lawyers’ communication with Baghlan Group)
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When this year we were preparing to bring the case to the court we got bad news on financial difficulties of Baghlan Group. Later we heard that our shares were pledged by Baghlan to its lenders. Due to such legal deadlock, currently this issue is awaiting its legal solution.
Taking the moment, I would like to declare that neither I, nor any of my companies had any involvement in the negative development that took place within Bahar Energy for the last couple of years. All these events took place after we gave up control and assigned the shares to Baghlan.
Q. Finally, as far as we are aware, Global Witness, Radio Free Europe and other similar organizations are preparing a new wave of attacks on you and it is expected that a new biased and ill grounded report will come up shortly targeting you, SOCAR and Azerbaijan in general. How can you comment on this?
A. Yes, indeed I am aware of this. It should be expected any way, since their previous attacks using false and ill-grounded reports did not have a great effect as they assumed initially. For these reasons, they would definitely come up with new reports and try to strengthen their position adding more groundless and even false arguments and facts.
For instance, if you refer to publications of some local media, you can have a feeling that they are trying to blow some matters and assist some overseas forces, and the latter are actively using such false and groundless information in their reports. Likewise, some local media is blowing any even minor negative information published about me abroad. They produce fake conclusions in their publications and prepare special broadcasts dedicated to such matters. Such activities are beyond professional journalism and business ethics.
I am also aware that they are working for a long time and they are not able to find anything against us that is satisfactory for them to damage the country’s reputation. In other words, due to the lack of serious and well-grounded negative arguments against me, they will be falsifying the facts and blowing out certain subjects out of proportion. All these facts and arguments will be introduced in their new report having only one goal to show everything in negative manner.
You can already observe this in practice. For example, Radio Free Europe has already published a new article against me based on false and groundless documents took from unknown hackers resources. It is undeniable fact that the reference to any documents can take place only if they are obtained legally and officially from the relevant official authorities. It never took place in the discussed cases and the said organisations are using fake and false documents to confuse the society and create social tensions in Azerbaijan. In this case a reasonable question comes up ‘where is their so-called responsible journalism principle?!’
In my own turn, I would like to call upon all readers and warn them in advance not to believe and accept seriously new reports from the said organization or media resources. We know and are sure that they would use ill-grounded and sometimes false facts and arguments against Azerbaijan and me. They believe that by doing so they can blackmail and keep under the permanent pressure Azerbaijan both economically and politically.
However, I am confident that the Azerbaijani society through all these years has got unrivalled experience and would not accept seriously any provocative or false reports prepared by those who have taken a hostile position against Azerbaijan…
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When we read Editor-in-Chief’s note about Anar Alizade in the Business Time magazine for the first time, we perceived it with some irony and doubted the truth of his words. However, during the 2 months of preparation of this interview and our meetings with Anar Alizade in Baku and Dubai, we found all those positive notes about our interviewee being true. We were impressed by his sincerity and patience even when we came up with quite provocative questions. Mr Alizade promised us to give new interviews in the nearest future…
- Anar Aliyev’s interview in the Last Word rubric to the prestigious Oil&Gas Middle East Magazine
- SOCAR provides well-deserved response to Global Witness allegations