Issue link: https://maltatoday.uberflip.com/i/252940
maltatoday, SUNDAY, 2 FEBRUARY 2014 14 News JAMES DEBONO AZERBAIJAN'S state-owned oil and gas company SOCAR, which forms part of the ElectroGas consortium that will supply Malta with natural gas for the next 18 years, has been accused of opacity in its dealings with private individuals, at the expense of Azeri citizens. SOCAR has threatened to sue Global Wit- ness, the NGO known for its crusade against blood diamonds, with the oil company reiter- ating its commitment at ensuring maximum transparency of its activity. The report, 'Azerbaijan Anonymous', reveals that SOCAR Trading SA's parent company Su- pra Holdings, the company accused of netting enormous profits in the alleged dealings docu- mented in the report, has long been based in Malta. Global Witness has campaigned against cor- ruption and associated environmental and hu- man rights abuses for the past two decades, and in 2003 was co-nominated for the Nobel Peace Prize. In its report, Global Witness reveals the shad- owy figure of little-known businessman Anar Aliyev, as having gained ownership stakes, some highly profitable, in at least 48 deals with SOCAR, "though it is not clear why he is in- volved and how his involvement is of benefit to the country". Global Witness says it was unable to find out anything about Aliyev's history except that he was born in 1978 in Nachchivan, and all at- tempts to contact the reclusive figure failed. Its research raises the concern that private in- dividuals, including Aliyev and others he may be fronting for, could be benefiting at the ex- pense of the citizens of Azerbaijan. Companies he owns have announced profits of US$375 million in deals involving the handling of Az- erbaijani oil, though in most cases, Global Wit- ness could find no evidence that these com- panies were selected through proper bidding processes or public tenders. In just one example, Aliyev made US$118 million in profit in exchange for an investment of just US$5 million in SOCAR's Swiss-based oil trading arm SOCAR Trading. The reasons for his company's involvement have not been adequately explained. The ownership of many other companies that have partnered with SOCAR has not been made public, so it is unclear who is benefiting from some of Azerbaijan's oil deals. Malta-based Supra Holdings, the parent company of SOCAR Trading, was only 50% owned by state-owned SOCAR with the other 50% owned by two offshore companies: Herit- age General Trading owned by Anar Aliyev, and Renfrel Holding which is registered in the British Virgin islands. It was only in 2012 that that SOCAR Trading was fully taken over by the state of Azerbaijan, after it bought shares from the private share- holders. But subsequently, a new partly privately- owned middleman was inserted between SO- CAR Trading and SOCAR: namely, SOCAR International DMCC, based in Dubai. Hidden private shareholders own 50% of DMCC. Company annual reports shows that nearly all of DMCC sales in its first two years of op- eration were not to outside parties, but parent company Supra Holding. The oil sold by DMCC to Supra was worth US$5.77 billion in 2012, and DMCC made profits of US$66 million "purely by selling oil from state-owned SOCAR to state-owned Su- pra Holdings." While SOCAR and its partners may well have acted within the law, the report claims that the lack of transparency about how these compa- nies came to be involved in the Azerbaijani oil industry raises serious questions over potential Socar Trading SA was incorporated in Switzerland on 17 December 2007. Supra Holding was registered six days earlier in Malta 'Global Witness claims SOCAR uses shell companies to sell its oil to itself • SOCAR says its business model allows it price control' Azeri gas suppliers accused of 'opaque trading practices' Nobel-nominated Global Witness accuses Malta's gas supplier SOCAR of using opaque trading practices to enrich a few individuals