Editor’s Foreword:
A year passed since the publication of the Report onAzerbaijan’s oil industry by Global Witness. We paid some attention tothis Report in our previous publications.
During this period we tried several times to approach Mr AnarAliyev (Anar Alizade), a person whose name was keyword in the referredReport, to give us an interview. Despite the initial reject of ourrequests we were able to convince Mr Alizade two months ago to give usthis 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 ofdiscussions and rumours; and it raised a number of questions withrespect to a transparency of SOCAR activities, the company which is oneof the leading oil brands in the world. How did you set up a partnershipwith SOCAR, which was not known to the public before the publication ofthe aforementioned report? Is the family relation factor present inthis case allowing you to benefit?
A. As was mentioned by me several times before, neither theAzerbaijani society nor I have any doubts about the biased position ofGlobal Witness. It is well known that the report was published in 2013right before the signing ceremony of major energy project’s launch,which are quite important in the light of current geopolitical situationin the world. However, even if it is obvious that Azerbaijan is themain target of the report it is still not clear for me, why precisely Iwas chosen as the main subject of discussions. Taking this opportunity, Iwould like to stress once again all my previous statements made in mypersonal statement and follow-up interviews on biased, contradictory andgroundless nature of the report.
If we refer to the position of Global Witness, we can see that theynever brought any corruption allegations against me and it was furtherconfirmed 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 theseissues and since I am currently known to the public, it can be claimedthat all matters of transparency and the lack of publicity in my casehave been addressed in full. In this case, the attempts to further raiseadditional questions and blow these matters are nothing, but a clearindication of their biased approach towards me.
(http://www.globalwitness.com/sites/default/files/library/Global_Witness_Statement_in_response_to_comments_by_MrAnarAlizade%28Aliyev%29_0.pdf)
It clearly shows that all allegations made in the report arecontradictory and groundless. I believe for these reasons they aretrying to accuse me at least of something (with irony: ‘they even do notknow of what exactly’).
As it concerns the question of family relations, I have clarifiedthis issue in my personal statement and follow-up interviews. I have nointentions to return to this matter again. Coming to the issue of mybusiness partnership with SOCAR, I can only state that our cooperationis based on mutual benefit and trustworthy collaboration.
Q. There is some controversial information about you in thelocal Azerbaijani information resources. Some claim that you are arelative of SOCAR President Rovnaq Abdullayev and all your achievementswere possible due to his great support, others contend that you are atalented and successful young businessman supported by SOCAR. As far aswe understood Global Witness emphasises on the first issue of familyrelations. Could you please clarify this?
A. I have no intention to return to this issue again. I haveaddressed this issue in my personal statement and the follow upinterview to Business Time.
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(Ed.: Anar Alizade in his personal statement (http://www.ugepte.com/index.php?page=page&MasterPageID=1&ID=55) and the interview with Business Time (http://anaralizade.com/?p=136&lang=az) denied family relations with any powerful representatives of political establishment)
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This organisation simply was not able to demonstrate my familyrelations with any powerful officials, and for these reasons, they nowraise questions on ‘any other forms of family relations.’ As todiscussion of my family members, I believe that it is beyond the ethicsand 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 withoutverification of verbal information got from our sources made statementsabout some family relations of Mr Alizade.
However, our journalist investigation undertaken within the lasttwo months did undermine this statement and our interviewee produced anofficial acknowledgement from the competent authorities on the lack ofany family relations to any high officials in Azerbaijan. We eyewitnessed this official certificate)
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Q. The report indicates that until 2012 you were one of thefounders and shareholders of SOCAR Trading, one of the top companiesdealing with trading in crude oil. Was there any necessity in such acompany, given that SOCAR itself always had an opportunity to employprofessional experts and sell its crude? What was the benefit forAzerbaijan from such a business partnership?
A. I do believe that when our common friend, a well-knowninternational businessman, introduced Mr Valery Golovushkin to me in2006 in Istanbul, it was a benchmark for future SOCAR Trading successfulstory. I believe there is no need to go back again into the history ofSOCAR Trading creation, since it has been addressed in my previousinterviews and statements. I do not want to comment much on this, but Ido believe that independent reports produced by well-known internationalexperts such as Wood Mackenzie and Boston Consulting Group are the bestresponses addressing such question. They are available at the company’sofficial website.
(http://www.SOCARtrading.com/en/SOCAR-trading-performance-review-by-bcg-337.html; http://www.SOCARtrading.com/en/azeri-light-valuation-study-by-wood-mackenzie-333.html)
From the said reports of BCG and Wood Mackenzie it can be seen thatdue to the set up of SOCAR Trading and its effective marketing strategyin 2008-2013 Azerbaijan benefited from $1.7-1.8 billion profit and whichled to increase of ‘Azeri Light’ premium. Moreover, SOCAR Trading hasbrought an additional $500 mln profit to Azerbaijan from the thirdparties trading and transit through BTC pipeline.
I urge you to research and carefully read the said reports asprofessional independent journalists. I do believe it may bring clarityon most issues.
Their main provocative argument is that I earned hundreds of millionsof dollars only investing $5 mln into SOCAR Trading. However, I wouldlike to bring to your attention that, if in 2007 I invested $5 mln intothe unknown company with unpredicted future, which lacked any financingsources, on my own risks, later in 2012 I sold the shares ininternationally renowned oil trading brand. As I mentioned several timesbefore I did provide financial support to SOCAR Trading during itsdifficult times. Today, I can state with certain amount of confidencethat without my support this company would not have good chances tosurvive in the light of difficult financial challenges.
A well-known international evaluation company clearly defined thatthe market price of my shares in SOCAR Trading as of 30 June 2012 wasmuch higher than the sale price. I do believe that it addresses theprevious provocative question.
I always ask the same question ‘whether the same could happen tosomeone else, who is of different nationality, let’s say from WesternEurope, and whether the same attitude would have been taken againsthim?’ I believe that it is worthy in this case to refer double standardsissues.
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 personallybelieve that it is groundless and illogic. First of all, I’d like tomention that before setting up SOCAR Trading I possessed an unrivalledexperience in general trading of oil and gas equipment and some productsas well as in trading of various goods. Moreover, I did possess a goodexperience in successful setting up of major businesses in foreignjurisdictions.
Last, but not least, it can be referred to numerous examples whencertain people without a great experience in specific fields hadconsiderable 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 upof this company, its realisation and providing necessary financialsupport.
In fact, I initially achieved substantial positive results andsuccess in commerce in non-oil sector. Today the major part of mybusiness and profit still constitutes the non-oil sector. I successfullyimplemented 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 rumours 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 clearlyshows that this organisation targets not only me, but Azerbaijan ingeneral.
It is interesting that Global Witness is hiding its sponsors and‘customers’ and does not disclose in full their list. It is clearlyindicated at the website of this organisation (http://new.globalwitness.org/support-who.php).In this case a reasonable question arises why the organisation pursingthe goals of global fighting for transparency is hiding its sponsors and‘customers’!? Don’t you think that in the matter transparency theyshould start from themselves? Don’t you think that in the lack of suchtransparency it is unknown whether the Armenians or the Armenian lobbyor any other forces hostile to Azerbaijan stand behind such campaignsagainst me and Azerbaijan or not!?
Moreover, I urge you to pay attention to the financial statements ofGlobal Witness. You can see explicitly in the statements that thisorganisation is not simply pursuing its usual activities, but it mostlydedicates its activities to ‘special tasks’ for which it gets most ofits financings. In other words, their day-to-day activities would notallow them to finance the preparation of such reports. Therefore, it canbe assumed that the report, which was prepared against Azerbaijan, wassponsored and financed by such ‘customers’.
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(Ed.: We have witnessed this fact when Global Witnessfinancial statements were reviewed, which we got from their officialwebsite. The names of some of the sponsors are not disclosed and theothers are well-known companies and organisations. Most of these namesdisclosed at the website are known as the ones who always took hostileposition against Azerbaijan. You can personally check it at
http://www.globalwitness.org/sites/default/files/GW%20Annual%20Accounts%2030%20Nov%202013.pdf)
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Q. Did you face any competition by other oil tradingcompanies when you were one of the managers of SOCAR Trading? We believesuch a competition to be quite natural in a situation, when a companysuddenly and aggressively enters into oil trading market and takes over asale of substantial volumes of Azerbaijani crude oil…
A. As I already stated several times before, I was never involved inmanagement 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. Itsset up, activities and achieved results were the outcome of long-termplanned strategy led by such professionals as Mr Valery Golovushkin. Ifyou refer to the reports of independent international consultingcompanies, which I mentioned earlier, you can clearly see the benefitand profit, which Azerbaijan gets from setting up SOCAR Trading.
In the meantime, I must accept your argument that our achievementswith SOCAR Trading could indeed be a reason for jealousy and concernsfor major oil companies. I believe that as in all fields there is acompetition in oil trading business and SOCAR Trading faces suchcompetition 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 ofSwiss laws. The company complied with all requirements on providingaudited financial statements to the relevant state authorities ofSwitzerland since its establishment, and it always complied with its taxobligations.
In brief, I can confirm that such audits by top international auditcompanies never revealed any illegal activities, tax issues, corruptionmatters 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 thecompany as one of the shareholders. The purpose of such audit was tolearn about the outcome and benefits of the company’s establishment. Asfar as I know, the report produced by Wood Mackenzie provides a detailedanalysis on positive outcome of creation of Azerbaijani oil tradingcompany and profit brought by it to Azerbaijan.
Q. Although there is no direct corruption accusations in theGlobal Witness report, it stresses a serious problem with the lack oftransparency in this case. Azerbaijan was among the first countriesjoining the EITI. However, now this report refers to serious problemswith oil sector transparency in Azerbaijan. It was revealed that AnarAliyev as a long-term partner for SOCAR was not known to the publicincluding most of NGOs who joined the EITI. Why there was no informationknown to the public about your business partnership with SOCAR?
A. All these claims and accusations are groundless. Indeed, I neverhid from the public. For instance, if you simply typed my name in anyInternet search systems you could find my name among the members ofSOCAR Trading’s Board of Directors since its establishment in 2007. Thisinformation was always publicly available and was never hidden.Moreover, this information was placed and always available at SOCAR’scorporate website. Could be there more transparency?
As to why I was not known to the public, I may state that there werecertain reasons for this. One of the main reasons was the privacy issueand protection of my private and comfortable life and that of my familyfrom interference of the media. It is well known now that after thereport’s publication there is a serious issue with the interference inmy private life and business activities by various mediarepresentatives.
My negative public image has been formed with an active support ofsome local and foreign media. In its own turn, it threatens my and myfamily’s security. Although we feel safe in Azerbaijan, we are concernedwith such negative ‘popularity’ of ‘unofficial millionaire’ created byGlobal Witness and some media, which may potentially attract theattention of certain criminals. Undoubtedly, it a considerable threat tomy and my family’s security abroad. Moreover, due to my personalcharacter I was always trying to avoid publicity and popularity. As youcan see, it is actively used against me now.
The most interesting thing is that they blame me for wrongdoings thatare not even known to them. Do you think that an avoidance of publicityand active self-advertisement means lack of transparency or mysterioushiding? Is any of this can be treated as a serious offence? I believe itwould be right to start from their own case and disclose all detailsand information about their sponsors and ‘customers’ to the publicbefore groundless blaming of others in a lack of transparency.
Q. As is indicated in the report and confirmed by you in yourstatements, you sold your shares in SOCAR Trading to SOCAR, and now youstate that you are not involved in the sale of Azerbaijani crude? Howcould you comment on this?
A. Yes, I confirm that currently I do not own any shares in SOCARTrading. The shares, which belonged to me before, were sold to SOCAR formuch lesser value than the market price. Such price discrepancy hasbeen already confirmed by independent international evaluation and auditcompanies. However, the share purchase agreement on SOCAR Trading wassigned and entered into in 2012, and SOCAR agreed to pay their fullvalue, but the full payment of the shares has not taken place yet.
Q. Another foreign company, which was granted a right to sellAzerbaijani crude, was Sumato Energy. Do you have any connection tothis company? For instance, it is argued that your two days stay at ahotel in Geneva was paid by Sumato’s representative…
A. Use of such false and provocative information and its activespreading in negative manner pursues certain goals. They are simplytrying to use such negative information in order to attract moreattention to this case.
As for my stay in Geneva and payment of my hotel fees, I would liketo draw your attention to the fact that it was clearly indicated in thereport that all such information had been got from sources provided bywell-known hackers group. Moreover, it is generally believed that theinstruction to place such contradictory and false information on theInternet was given to hackers by special security services of a hostilecountry. There should be no doubts about the groundless and illegalnature of such documents.
Q. What about UGE-Lancer, another unknown company. In 2011SOCAR produced the PSA on Balakhani-Sabunchu-Ramani and Kurdakhani oilfields to the Parliament and introduced UGE-Lancer as a foreign company.However, the report indicates that this company is related to you. Howwas your company chosen for this project?
A. There is nothing strange, the referred company is really a foreigncompany set up abroad, and it belongs to my Group of Companies. It waslogic to introduce it as a foreign company.
I would like to draw your attention to the fact that foreigncompanies are mainly interested in major offshore oil fields in theAzerbaijani sector of the Caspian Sea. Most of these oil fields are newand contain rich oil and gas deposits. In contrast, most of onshore oilfields are old exhausted ones inherited from Soviet times. All of themhave collapsed infrastructure and overloaded with heavy socialprogrammes. Therefore, such oil fields were not commercially attractiveto most of foreign investors.
As it was mentioned the PSA practice in Azerbaijan is based onrequests and negotiations process. Conduct of tenders for these purposesis not provided under Azerbaijani legislation.
Our request was accepted by SOCAR as an interesting offer. You canwitness now how right such decision was. Due to successful activities ofmy company, oil production at this oil field increased almost twice andI am fulfilling my obligations as the investor. Today you can comparethe effective infrastructure and work conditions of my employees. Incontrast to other similar onshore oil fields, the built infrastructureand work conditions at my sites are much better. I urge you to look atthe comparative pictures ‘before’ and ‘now’ placed at my holdingcompany’s corporate website.
(http://www.ugepte.com/index.php?page=page&MasterPageID=2&ID=62)
Moreover, there was no massive scale staff cut since the period wetook over the referred oil fields. In contrast, we employed many newemployees. You cannot find any similar effective management at any otheronshore oil projects including those operated and managed by majorforeign oil companies.
I would like to bring to you attention another important thingrelated to this oil field. My company is even fulfilling its obligationsunder certain social programmes. In the nearest future 18 familiesamong our employees will receive apartments. We are planning to provideaccommodation to 300 more families. There is a massive on-goingconstruction at the moment. I would like also to draw your attention tothe fact that all funds allocated for these social programmes arededucted from my net personal income.
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(Ed.: It is quite important fact to be mentioned that ourinterviewee is allocating the funds for social programmes from his netpersonal income. In contrast with the others, he is not using thecompany’s profit for these purposes…
We have also visited the sites of the referred oil fields andbecame eyewitnesses to what was stated by Anar Alizade about all thathad been undertaken there. In fact, we were satisfied with everything wesaw there, from the working conditions to employees uniforms… When wesaw it, we decided that it was absolutely necessary to comment on this.Moreover, these positive facts have been also mentioned in the reportsof some independent NGOs.)
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Don’t you think that our achievements are solid evidences of SOCARdecision’s correctness to award us the referred oil fields? I do believethat only time and achieved results are the best responses to anyquestions. In my opinion, there is a positive answer to the raisedquestion.
Q. Do you have any connection with SOCAR Petroleum, a companythat is now among the top leaders of petrol stations services market inAzerbaijan? 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 youngprofessional local employees paying them competitive salaries andprovide necessary financial assistance when needed. Moreover, A.P.International which owned certain assets and infrastructure inAzerbaijan, was important for SOCAR to successfully implement itsproject referred as ‘SOCAR Petroleum’.
Upon establishment of this company, our group believed that it wouldbe successful and profitable. From our side we transferred all theassets from A.P. International to SOCAR Petroleum and huge investmentswere contributed to this company, which allowed it to build new chainsof petrol stations. No dividends were paid to me throughout thecompany’s activities and my shareholding period.
However, in spring 2013 we got and offer from SOCAR to buy my sharesin SOCAR Petroleum. After certain negotiations I decided to sell myshares and without taking into account investments and assetscontributed by me within 7 years I was offered to sell the shares fortheir real balance value. Although there was an independent evaluationand the shares’ value was much higher than the proposed sale price, Iaccepted the offer…
In the meantime, please note that upon completion of shares saleprocess, fuel prices were substantially increased in Azerbaijan, whichled to the dramatic increase of SOCAR Petroleum’s profit and the valueof my shares sold to SOCAR.
Q. Global Witness claims that you are represented orshareholding in at least 48 various projects with SOCAR. How can youcomment on such complicated business partnership? Can you pleaseclarify, how did you get such opportunity to partner with SOCAR? Werethere any tenders conducted in this regard?
A. This is inaccurate information, and I have already clarified thisissue in my personal statement and follow-up interview to Business Timemagazine. I never partnered SOCAR in such huge number of projects orjoint ventures. Currently, the number of our joint projects with SOCARdoes not exceed seven, and all of them are disclosed at SOCAR’scorporate website. The most interesting is that they paid such hugeattention to the number of projects with SOCAR, but they never mentionedanything about a huge number of the projects, which I withdrew becausethey were not commercially attractive for us. For example, they didn’tmention anything about the projects in Georgia, Romania and Turkey,which I quit for the same reasons. Please note, that I had quit some ofthese projects a long time before the report was published. I evenengaged independent lawyers to represent my interests in the process ofleaving those companies, since these processes were complicated and timeconsuming.
Today, I am asked whether I have left those companies or not. I dobelieve that such requests should not be addressed to me, but directlyto their sole shareholder SOCAR. Moreover, such information can beeasily obtained from the audited annual financial statements of SOCARavailable to the public at its corporate website.
The main purposes of Global Witness’ report in referring to such hugenumber of the joint projects with SOCAR was nothing, but just toattract more attention to this matter and make it a scandalous subjectfor further active discussions. Possibly, they had an intention toaffect my relations with SOCAR as well. No doubts, that by doing so theydid understand that such strategy would allow them to create mynegative image in the Azerbaijani society.
Global Witness always asks me the same question, whether SOCAR wasrequired to or conducted any tender procedures for my selection as abusiness partner. As a response to this question, I can state in briefthat in most fields there is no requirement to conduct a public tender. Iam sure, the said organisation is well aware of these requirements. Forinstance, the process of awarding and signing of the product sharingagreements (PSA) with SOCAR is based on direct request and negotiationsprocedures and it applied to all existing PSAs in Azerbaijan. Moreover,as you can see these people do not even attempt to request aprofessional legal advice on this issue from Azerbaijani qualifiedlawyers. They often ask me, why SOCAR partnered me without any tenders.However, they never reviewed or referred to Azerbaijani laws or SOCAR’sprocurement procedures. Please note, that Azerbaijani legislation doesnot provide a requirement to conduct a tender or any other publicselection procedure for partnering in joint ventures. As you can see,they do not give a preference to the letter of law, but to false andinvented arguments and facts. Undoubtedly, it must be treated as anindicator 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 organisation.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, financeand audit experts is hired by me for this case. The notice that Ireserve my right to sue for libel has been already submitted to GlobalWitness by my lawyers. Please note that my lawyers will make a decisionon whether to start the proceedings and when they will take place.
In the meantime, I would like to stress that the said organisationemphasises in its statements and separate interviews that they neveraccused me of any illegal activities.
(http://www.globalwitness.org/sites/default/files/library/Global_Witness_Statement_in_response_to_comments_by_MrAnarAlizade%28Aliyev%29.pdf)
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(Ed.: Indeed, what does it mean? Does it mean that Global Witnessstepped back due to its unsupported position and ill groundedarguments!?)
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Q. Perhaps as an experienced businessman you are aware thatfor the last couple of years there is a trend in global business underwhich the use of offshore structures at certain extent is considered ascorruption. The issue of substantial funds hidden in offshore zonesstarted attracting more and more attention after the global financialcrisis. Under such circumstances, how did you build your complexbusiness partnership with SOCAR and what preferences did you get fromusing such difficult offshore mechanisms?
A. You are not quite accurate in stating this. I never used anyclassic offshore structures in my business relations with SOCAR. Moreover, my holding group’s top parent company was set up in one of themost transparent and respectable jurisdictions in the world. Straightafter Singapore company’s incorporation I registered its representativeoffice in Azerbaijan and declared its existence to the Azerbaijaniauthorities. In the meantime, the profit generated by this group ofcompanies were properly declared and relevant income taxes were paid byme in Azerbaijan.
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(Ed.: Our interviewee produced shocking documents concerning thismatter, and we saw that he had declared his profit generated abroad andpaid extremely huge taxes to Azerbaijani State Budget. We eye witnessedthis, and we should mentioned that it is a rare case for Azerbaijan…)
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In other words, we never used offshore structures for the purposes oftax evasion, hiding something or committing any crimes. There are manyreasons why I established foreign companies for specific businesspurposes. For instance, the set up of such foreign companies gave us achance to establish effective business relationships with our foreigncounter partners. If we operated strictly within Azerbaijani companiescontext, we could definitely face many restrictions (foreign currencyregime, import and export issues, special permits/licences, etc.)
Moreover, the use of such foreign companies allowed us to get anaccess to most of effectively operating banks, since those banks arereluctant to open accounts for Azerbaijani entities.
However, despite using foreign companies, as I mentioned before, mostof my income is used for the purposes of re-investing into Azerbaijaninon-oil sectors. All these give me an opportunity to create new jobs andpay 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 andpaid huge taxes? In fact, we are confused with such questions. In themeantime, it gives us more comfort to believe that our interviewee’sposition is well-grounded and reasonable)
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Q. What can you tell about ‘White City’ project? On whatgrounds are you participating in this project and how was your companyselected 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 aswell as in Azerbaijan. Since the project looks quite attractive and, as Ialways declared, my main goal at all times was to re-invest my incomein Azerbaijan, we have expressed our interest to the project’smanagement. Since the project is open for all local and foreigninvestors our offer was welcomed by the project’s management team. Asyou probably know the White City Project is a fixed design project andinvestors are offered to contribute and develop certain parts of thisprojects based on the General Construction Plan. Such offers are madebased on investors’ financial capacity and ability to fulfil theirobligations. Based on such criteria, we were offered and we chose theproject on construction of an office building. For these reasons,without hiding anything under the sole ownership of my group’s topparent company we set up a local company. The process of investors’invitation and joining the White City Project is transparent as per theinformation 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 structurescould be used instead.
Q. Everything sounds quite reasonable in terms of what yousaid to other media sources: ‘After collapse of the Soviet Union whenthe borders with Turkey were opened I was actively involved in import ofTurkish textile and food products … At the same time I was active incar import business.’ As far as we understood, you were 12-14 years old,weren’t you? We believe it impossible to be engaged in successfulbusiness, when you are of such age. Could you please clarify this issue?
A. Either your question is provocative or you experience certainproblems with simple arithmetic calculations. For your information, I amcurrently 37 years old. The referred citation from my interview is ageneral description clarifying that after the collapse of the USSR andopening borders with Turkey people in my country including myselfbenefited from such advantageous business relationship. As to me, Istarted my business activities in Turkish direction in late 1990-s andat that time I was over 20. I do understand that some people accept mysuccess in my young age as impossible. However, it is true and proven byall my current and subsequent achievements. Sometimes, I have a feelingthat some forces are not happy with my achievements, and for thesereasons, they produce such provocative statements against me.
Q. You also stated that after moving to Baku in early 2000-syou entered into an active real estate sale business in Ganjlik, one ofthe most prestigious districts of Baku. At that time you were a littleover 20. Don’t you think that in order to be successful in such businessyou need to have a good support, particularly in Azerbaijan? We canadmit 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 formy success was the support of my family. My family had a transportcarrier business using Nakhchivan-Turkey route and the income generatedfrom such activities greatly assisted me to launch and successfully runthe real estate business in Baku. This took place without anyone’sassistance or interference.
I believe that my non-public profile and the effective use ofproceeds generated as a result of my business activities are among thekey factors allowing me to succeed. In fact, I can refer to many othersimilar cases when the others succeeded without anyone’s support andassistance. However, as result of unreasonable interference by media,which sometimes use the dirty methods to damage the reputation, suchpeople prefer to avoid any communication with the media. I believenobody would agree if the media would start doubting his achievements,since it could also harm his businesses. In other words, this is one ofthe main reasons why younger generation prefers to avoid anycommunication with the media.
Q. You state that you have achieved everything personallywithout any support. How then can you explain that the money generatingoil businesses started their development since Mr Rovnaq Abdullayev wasappointed to his current office in 2007?
A. It is not accurate information and the main purpose of suchcampaign is to again damage my reputatio. I was never employee of SOCARand did not hold any high level position there. I started my cooperationwith SOCAR in 2000-s, before Mr Rovnaq Abdullayev was appointed.Starting from that time SOCAR accepted me as a reliable partner. In themeantime, our cooperation with SOCAR was developing also after MrAbdullayev’s appointment. I believe that such statement is nothing, but adirty PR campaign against me.
Q. In your interview to Business Time magazine you mentionedthat Azerbaijan was under a pressure when SOCAR was selling crudethrough foreign companies. Sorry, but if you were talking about tradingcompanies, then what political pressure could they exert on Azerbaijan?We believe that such companies actually approach oil countries with acooperation request. Are you aware of any facts when foreign tradingcompanies used certain pressure mechanisms against Azerbaijan?
A. In fact, what you have just said is far beyond the reality. It is atrue statement and Azerbaijan did face such a situation. During certainhistoric moments, all those companies united their efforts and managedthrough a single centre to put a pressure on Azerbaijan through agreeingnot to buy Azerbaijani crude. As a result, Azerbaijan had huge volumesof crude unsold and it negatively affected its economy. Through such ascenario, they achieved to get good conditions for the sale ofAzerbaijani crude. In the meantime, they used it to prevent Azerbaijanto become one of the independent energy providers. If you research a biton this matter, you can find a lot of interesting information.
Another interesting fact related to this matter is that Azerbaijandid approach major oil companies with a request to set up a jointtrading company. However, none of them expressed an interest in thisoffer. Did you ask yourself, why?! It raises many other questions.However, I believe that the answer to all these questions isstraightforward. It is undeniable fact that foreign companies neverwished to control such trading company on equal basis with SOCAR andshare the generated income with the latter. As for SOCAR Trading, todayyou can see how successful was the decision on its set up. Indeed, I amproud that I was participating in creation of such powerful oil-tradingarm for Azerbaijan.
Q. Do you plan any actions to end this transparency issueafter publication of Global Witness Report? You managed to get rid ofthe ‘Mysterious man’ reputation through your statement and follow-upinterviews. What about Global Wintess, the civil society organisationsor EITI? Are you planning to cooperate with them?
A. As I stated before I never was hiding. I always was law-abidingcitizen and paid my taxes over my income in Azerbaijan and abroad. Myholding group was set up in Singapore, one of the most transparentjurisdictions in the world and it does comply with all the requirementson transparency. The representative office of the holding’s top parentcompany established its representative office in Azerbaijan and theentire structure was declared in Azerbaijan. With certain amount ofconfidence, I can state that the transparent business model that I builtis one of the first and a unique one for Azerbaijan. I am proud ofthis…
I do not see any necessity to cooperate with the referredorganisation. Since their biased position is so obvious that I have nodoubts about a chance to be fairly and objectively treated by them. Forinstance, let’s take Global Witness; they never provided links of orplaced my statements or interviews on their website. Can you see anyfair and objective approach there? Let’s take my first interview toBusiness Time magazine which was given originally by BT in two languages(Azerbaijani and English) and was provided to Global Witness by mylawyers. However, they provided only the Russian version of thisinterview, which is a simple translation for some Russian speakingaudience. This organisation never referred to any information from mypersonal website. They call themselves a strong, objective, fair andtransparent organisation, which is able to provide deep and thoroughresearches, but in the given case it shows again their biased positiontowards my case and that of Azerbaijan.
However, I shall continue providing information about my activitiesto the public. We will use my personal website and social networks. Asbefore I am always open for discussions with neutral and unbiased mediaresources.
Q. As mentioned in the report and also confirmed by you asbeing true, you sold your shares in SOCAR Trading and currently you haveno any relation to the sale of Azerbaijani crude at all. Could youplease then clarify the situation with your claimed 50% ownership inSOCAR International DMCC? It is currently claimed that this offshorestructure, where you have half of the shares, is selling crude…
A. I can confirm that currently I do not own any shares in SOCARTrading and as I stated several times before I was never directlyinvolved in the crude sale process and my role was always limited to‘passive shareholding.’ Once again I would like to stress that onlySOCAR has a power in Azerbaijan to sell crude on behalf of the State.
As for SOCAR International DMCC, I am not a shareholder of thiscompany at the moment. It can be easily checked and verified throughsubmission of the relevant requests to specific companies’ registry inthe jurisdiction, where the company is incorporated. Moreover, you canget this information from SOCAR’s corporate website and it was alwaysavailable at their audited financial statements.
I believe that it is worthy if SOCAR addresses the question on whythis company was established and what was the rationale behind it. Inthe meantime, I can briefly comment on a necessity of setting up suchcompany.
After creation of SOCAR Trading together with SOCAR it was decidedthat such successful experience should be used also in the UAE and itcould be beneficial to have another subsidiary under SOCAR brand. Themain goal for establishment of this company was to expand SOCAR’sactivities to the Middle East region. SOCAR International DMCC was setup just a couple months before completion of the first stage of FujairahTerminal. This Terminal was a joint project of SOCAR with the localpartners and it was designated for the development of Middle Easttrading business.
The main reason of my selection as a partner to SOCAR in SOCARInternational DMCC was my strong presence in the UAE, set up offices,professional team and already existing business network and contacts.
For the entire shareholding period, I was paid dividends only onceand it was $18 mln, which I didn’t take, but re-invested into thecompany for the purposes of its further development and growth. Itallowed the company to purchase new terminals and facilities. Along withSOCAR Trading, I was offered to sell my shares in SOCAR InternationalDMCC. After certain negotiations and proposals from SOCAR I agreed tosell my shares for the price equal to the amount of dividends which Iwas paid, but never took and re-invested into the company. No myprevious expenses or investments amount were taken into account upon thepurchase of the shares. In other words, my shares were sold to SOCARfor the value of my dividends…
Q. There is still ongoing scandal over Bahar Energy oilcompany. Massive staff reduction and non-payment of salaries are themain issues for Bahar Energy today. As far as we know, you were amongthe shareholders. How can you comment on this?
A. My company was one of the three shareholders who set up BaharEnergy. However, since this project was not commercially attractive forus and in order not to repeat the experience with previous similarlyunsuccessful projects, we decided to sell our shares to Baghlan Group,the shareholder who had a controlling stake in Bahar Energy and wasresponsible for the overall management. Information about thistransaction was publicly available and can be found in numerous Internetresources.
(http://www.theglobeandmail.com/globe-investor/news-sources/?date=20120430&archive=ccnm&slug=201204300786071001; http://www.greenfields-petroleum.com/News/54/)
Despite the execution of the share purchase agreement and transfer ofthe shares to Baghlan Group in 2012, we were not paid the value of theshares. Although a long discussion took place with Baghlan Group throughour lawyers, no effect was achieved.
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(Ed.: We have been provided with all the necessary documentsconfirming the interviewee lawyers’ communication with Baghlan Group)
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When this year we were preparing to bring the case to the court wegot bad news on financial difficulties of Baghlan Group. Later we heardthat our shares were pledged by Baghlan to its lenders. Due to suchlegal deadlock, currently this issue is awaiting its legal solution.
Taking the moment, I would like to declare that neither I, nor any ofmy companies had any involvement in the negative development that tookplace within Bahar Energy for the last couple of years. All these eventstook place after we gave up control and assigned the shares to Baghlan.
Q. Finally, as far as we are aware, Global Witness, RadioFree Europe and other similar organisations are preparing a new wave ofattacks on you and it is expected that a new biased and ill groundedreport will come up shortly targeting you, SOCAR and Azerbaijan ingeneral. 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 didnot have a great effect as they assumed initially. For these reasons,they would definitely come up with new reports and try to strengthentheir position adding more groundless and even false arguments andfacts.
For instance, if you refer to publications of some local media, youcan have a feeling that they are trying to blow some matters and assistsome overseas forces, and the latter are actively using such false andgroundless information in their reports. Likewise, some local media isblowing any even minor negative information published about me abroad.They produce fake conclusions in their publications and prepare specialbroadcasts dedicated to such matters. Such activities are beyondprofessional journalism and business ethics.
I am also aware that they are working for a long time and they arenot able to find anything against us that is satisfactory for them todamage the country’s reputation. In other words, due to the lack ofserious and well-grounded negative arguments against me, they will befalsifying the facts and blowing out certain subjects out of proportion.All these facts and arguments will be introduced in their new reporthaving only one goal to show everything in negative manner.
You can already observe this in practice. For example, Radio FreeEurope has already published a new article against me based on false andgroundless documents took from unknown hackers resources. It isundeniable fact that the reference to any documents can take place onlyif they are obtained legally and officially from the relevant officialauthorities. It never took place in the discussed cases and the saidorganisations are using fake and false documents to confuse the societyand create social tensions in Azerbaijan. In this case a reasonablequestion comes up ‘where is their so-called responsible journalismprinciple?!’
In my own turn, I would like to call upon all readers and warn themin advance not to believe and accept seriously new reports from the saidorganisation or media resources. We know and are sure that they woulduse ill-grounded and sometimes false facts and arguments againstAzerbaijan and me. They believe that by doing so they can blackmail andkeep under the permanent pressure Azerbaijan both economically andpolitically.
However, I am confident that the Azerbaijani society through allthese years has got unrivalled experience and would not accept seriouslyany provocative or false reports prepared by those who have taken ahostile position against Azerbaijan…
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Editor’s P.S.:
When we read Editor-in-Chief’s note about Anar Alizade in theBusiness Time magazine for the first time, we perceived it with someirony and doubted the truth of his words. However, during the 2 monthsof preparation of this interview and our meetings with Anar Alizade inBaku and Dubai, we found all those positive notes about our intervieweebeing true. We were impressed by his sincerity and patience even when wecame up with quite provocative questions. Mr Alizade promised us togive new interviews in the nearest future…
BY EYNULLA FATULLAYEV, DUBAI // azeridaily.com
ANN.Az
