Erdoğan family’s offshore secrets spread to firms in Isle of Man and Malta

Turkey’s President is feeling the heat from his political opponents, who claim Erdoğan’s close relatives have one offshore firm. We can reveal they have three

by Craig Shaw

29 November 2017


Turkish media and the Twittersphere are buzzing with allegations made by the Turkish opposition that the family of President Recep Tayyip Erdoğan shifted millions to an offshore company called Bellway Limited in the Isle of Man

But this offshore business is just one part of a larger network involving a 25 million USD oil tanker, a childhood friend and an Azeri businessman close to President Trump

The leader of Turkey’s main opposition party claims he has documents proving that members of President Erdoğan’s family and their allies transferred at least 15 million USD to an offshore company in late 2011 and early 2012.

In a speech in the Ankara-based parliament yesterday, Kemal Kılıçdaroğlu, head of the Republican People’s Party (CHP), accused the Erdoğan clan of moving money to a foreign company called Bellway Limited, registered in the Isle of Man, a British-run tax haven in the Irish Sea.

Kılıçdaroğlu went on to list ten separate payments, totalling 15 million USD, he said were sent to Bellway by the Erdoğan family and their friends in December 2011 and January 2012.

Accusing the President’s family of shifting cash abroad: Turkish opposition leader Kılıçdaroğlu

The day before the meeting, Kılıçdaroğlu accused Erdoğan and his family of running offshore companies. Erdoğan called the allegations ‘lies’ and issued a firm ultimatum.

“[Kılıçdaroğlu] said that my kids, brother, brother-in-law, former secretary... sent millions offshore,” Erdoğan said. “Do you have any proof of your allegations? If so, show them to the public… If Tayyip Erdoğan has a penny abroad, in any bank, come out and prove it. When you prove it, I give you the guarantee that I will not stay in the Presidency one more minute.”

During the CHP meeting, Kılıçdaroğlu said that Erdoğan’s relatives - his brother, Mustafa, eldest son, Ahmet Burak Erdoğan, and brother-in-law, Ziya Ilgen - each paid 3.75 million USD into the account of the offshore company. He did not state where its account was located - which could be a different country from where the firm is registered.

Close associates also made payments to this account, he said, including 2.25 million USD from Osman Ketenci, Ahmet Burak Erdoğan’s father-in-law, and 1.5 million USD from Mustafa Gündoğan, Erdoğan’s former private secretary.

Cash transactions of the Erdoğan family, as revealed by opposition party CHP. Image source: BBC

The provenance of the documents obtained by Kılıçdaroğlu is not known, nor their veracity, and CHP says the party is waiting for an answer from Erdoğan’s Justice and Development Party (AKP) before it releases them to journalists.

But Bellway Limited is not the only offshore company owned by the Erdoğan family.

They have three.

The existence of offshore companies in the Isle of Man, including Bellway, and Malta, where the family owns a oil tanker, were first reported by and its media partners at European Investigative Collaborations (EIC) in May this year as part of the #MaltaFiles project.

EIC is an investigative cooperation between and European media partners, including Le Soir (Belgium), Der Spiegel (Germany), Mediapart (France), NRC (Netherlands), El Mundo (Spain), Dagens Nyheter (Sweden), Expresso (Portugal), L'Espresso (Italy), Falter (Austria), and Politiken (Denmark).

These revelations are not the only offshore schemes and tax strategies involving Erdoğan’s inner circle.

The #MaltaFiles and revealed how the family of Turkish prime minister, Binali Yildirim, had offshore assets in the region of 140 million Euro.

Another story exposed how Erdoğan’s son-in-law Berat Albayrak, when CEO of giant Turkish conglomerate Calik Holding, oversaw the establishment of an offshore structure designed to evade Turkish taxes.

Later, after he became Turkey’s energy minister, he secretly allowed Calik to write a tax law that could have saved them, and other rich business with money offshore, hundreds of millions in taxes.

Tell me more about these companies, and why such ownership is wrong?

Since around 2008, the Erdoğan family has operated a network of companies that stretches from Malta to Turkey and ends up in the Isle of Man. The companies are Pal Shipping Trader One Ltd in Malta, and Bumerz Limited, which, like Bellway, is in the UK-based tax haven.

Together, they act as an opaque offshore network designed to obscure the family’s ownership of a 25 million USD oil and chemicals tanker called the Agdash, built in 2007 by a Russian shipyard.

The structure works as follows: the Agdash is directly owned by Pal Shipping Trader One Ltd in Malta. Pal Shipping’s shares are owned by Bumerz Limited in the Isle of Man, which is owned by Bumerz Denizcilik in Istanbul. These shares are almost all owned by Bellway Limited.

How did they Erdoğans manage to pay for a 25 million USD oil tanker?

The answer is: they didn’t. and EIC unearthed company filings from Malta and Isle of Man, including Pal Shipping Trader One’s accounts from 2015, which shows the bill for the tanker - the Agdash - was paid by two businessmen close to the family.

The first is Sitki Ayan - mentioned by Kılıçdaroğlu in yesterday’s speech - who is a childhood friend of the president. He paid seven million USD from his Turkish company Som Petrol.

The remaining 18 million USD came from a loan from a disgraced Latvian bank called Parex. Public documents from the Isle of Man registry show that Bumerz Limited took out the Parex loan in 2008. The public documents were signed by Ziya Ilgen.

Signature of Erdoğan’s brother-in-law Ziya Ilgen listed as director of Bumerz Ltd, based in the Isle of Man

The Erdoğans never paid the loan. Instead, they leased the ship to Mübariz Mansimov, an Azeri-Turkish businessman and president of shipping conglomerate, Palmali Shipping, who agreed to pay off the 18 million USD, according to Pal Shipping accounts.

Mansimov allegedly made his fortune by taking over Russia’s oil shipping business, particularly on the Volga, and is allegedly now under investigation in Russia for fraud. He is close to President Trump, and even attended his inauguration ceremony a year ago.

Mansimov used to rent five other oil tankers from the Erdoğan family’s BMZ Group, based in Istanbul, before they were sold to Azeri energy giant SOCAR last year.

Why Mansimov agreed to pay the bill for the Agdash is not clear. Especially since it was the billionaire who ordered the ship in the first place in 2007. [Neither Mansimov nor members of the Erdoğan family would reply to our questions before our publication, nor issued a correction after our publication].

In November 2011, shares in the Erdoğan’s Turkish company, Bumerz Denizcilik, were transferred to Bellway Limited, a company set up by Sitki Ayan using an Isle of Man service company called Equiom.

Kilicdaroglu claims the transfers between the Erdoğan clan and Bellway Limited were made during December 2011 and January 2012.

Publicly, no one knows whose name is on the shares in Bellway Limited. This information has not been released or made available by Isle of Man business authorities. This secrecy, as well as the tax breaks offered by the country, is why many experts consider the island to be an offshore jurisdiction, or ‘tax haven’.

Sitki Ayan’s son, Bahaddin Ayan, and Kasim Oztas, an employee of Sitki involved in his petrol business in Turkey, appear as directors on various companies in the offshore network of Pal Shipping Trader One, Bumerz Limited, Bumerz Denizcilik, and Bellway Limited.

But documents from an offshore service provider in Malta show that years after the shares were moved to Bellway, Erdoğan’s brother-in-law Ziya Ilgen signed several declarations stating he was the ultimate beneficial owner of the Agdash oil tanker, and the offshore company structure.

Document revealing Erdoğan’s brother-in-law as owner of Malta-based company

The response by pro-government media in Turkey has been to denounce the information revealed as forgeries. This is highly unlikely.

Since CHP is yet to release the documents brandished by Kilicdarogu yesterday, it is unclear whether the millions of dollars mentioned relates to the Agdash.

Photos taken of Kılıçdaroğlu’s documents, showing snippets of the SWIFT transactions, suggest that the money goes in the opposite direction: the Erdoğans and their friends received millions from Bellway Limited, rather than gave to the Isle of Man company. Both bank accounts in the document below, however, appear to be in Turkey.

Photo grab of Turkish opposition’s claim of involvement of Erdogan’s brother Mustafa in offshore scheme

But until these documents are made available to the public and to journalists, it is not possible to know for sure the extent of, or the source of the millions described yesterday.

Even if Erdoğan knowingly hedged by threatening to resign only if CHP could prove he, personally, had money abroad, the family’s use of offshore companies in secret, the sending, or receiving, of millions through foreign companies located in tax havens and with hidden ownership, should be a scandal requiring an official investigation and public inquiry.

Photos: Erdoğan (WEF), Kılıçdaroğlu (CHP)