What business does Erdoğan’s family have in tax havens?

tower of refuge, douglas, isle of man. mariusz kluzniak / flickr (cc by-nc-nd)

The leader of Turkey’s main opposition party Kemal Kılıçdaroğlu revealed documents in parliament that he said showed money transfers between Turkish President Recep Tayyip Erdoğan’s close circle and an offshore company in the Isle of Man, a British island jurisdiction with zero percent corporate tax.

Ruling party officials and pro-government media pundits were initially confused about whether to call the documents fake, or to say they were real, but showed no wrongdoing.

Public records, however, reveal not one, but three linked offshore companies owned by Erdoğan’s close circle, two in the Isle of Man and one in Malta, another tax haven, Craig Shaw from online investigative magazine The Black Sea revealed in May.

Shaw recently updated his articles with more company records following Kılıçdaroğlu’s allegations.

Following public debate about the documents’ authenticity, Kılıçdaroğlu’s opposition Republican People’s Party (CHP) deputy Bülent Tezcan on Friday shared a 149-page pdf file that has scanned copies of official documents apparently belonging to Bellway Limited, registered in the Isle of Man, and bank records of money transfers, a total of $15 million, from Bellway’s account in Halkbank to Erdoğan’s relatives.

The first page of the document above shows a screenshot of what appears to be Halkbank’s internal query software, listing money transfers between Jan. 1, 2011 and March 3, 2014. While the start date of the query is unremarkable, since Bellway was founded in 2011, the end date is not, since the company continues to exist to this day.

A possible explanation could be that the person who had ran the original query and took its screen shot, did so back in March 2014. What is significant about that date is that it corresponds to other leaks from the December 2013 graft probe, most notably the wiretapped audio conversations between Erdoğan and his circle, where they allegedly talked about receiving bribes and favours from businessmen in return for public tenders.

Erdoğan, Turkey’s prime minister at the time, intervened with the investigation by replacing the prosecutors and police chiefs, and accused followers of the U.S.-based Islamic cleric Fethullah Gülen for attempting to overthrow the government. Gülen maintains that he was not involved.

After the investigation was suppressed, recordings of wiretaps were uploaded to YouTube under the title “Başçalan” (The Master Thief), right before local elections in March 2014. Erdoğan claimed the recordings were fake, but forensic experts mainly disagreed. Some of the tapes are now court evidence on a U.S. trial against a former Halkbank official.

Turkey corruption scandal: Erdoğan implicated in second leaked recording, Feb 27, 2014. FRANCE 24

When Kılıçdaroğlu was asked about the source of these documents, specifically whether they were provided by Gülen’s followers, the CHP leader was quoted by news website T24 as saying “there are millions of patriotic bureaucrats in this country”.

Patriotic or not, CHP’s whistleblower seem to have the ability to access official banking documents.

The scanned bank receipts in the CHP’s file are printed on Halkbank’s numbered letterhead, and appear to bear digital reference numbers and signatures of officials from the corporate branch of Halkbank in Salıpazarı, Istanbul. The IBAN (International Bank Account Number) of Bellway Limited, shown on the documents, is also valid, and points to the same branch.

Bellway’s certificates of incorporation, provided at the end of the CHP file, are notarised in two countries, the Isle of Man and Turkey, apostilled and filed with its sworn translations into Turkish, all of which are legal requirements for a foreign company to open a bank account in Turkey. These documents must be filed by Halkbank, and most likely, were accessed later by a banking official.

Halkbank did not respond to our request for comment on the authenticity of the documents.

Erdoğan’s lawyer Ahmet Özel was quoted by the state-run Anadolu Agency (AA), as saying that the allegations are not true and Kılıçdaroğlu should hand documents over to a prosecutor’s office.

A lawyer for Bellway Limited, Turan Öner, was also quoted by AA as stating that Erdoğan’s relatives had never sent such money to Bellway Limited, and any document that claimed otherwise was fake.

However, the original company records of Bellway Limited can be obtained for £15 from Isle of Man’s online company registry (they are provided at the end of this article).

Screenshot of Bellway Limited documents on the Isle of Man Government Companies Registry.

Clarifying the direction of money transfers, Erdoğan was later quoted by Turkish news website Diken as saying, his brother, son, two brothers-in-law, and his former executive assistant did not send, but received the money ($15 million from Bellway), for selling their company:

“These people [the relatives mentioned by Kılıçdaroğlu] are businessmen who have done important work in the last 30 to 40 years… There is nothing dubious about these transactions.”

Transparency International’s Turkey chair Oya Özarslan said the first-degree relatives of politicians should also be held accountable, as wealth can easily be transferred to them. International regulations on financial crimes also include family members and close associates of senior government officials (e.g. FATF recommendations, p.19).

How then did the president’s son, Ahmet Burak Erdoğan, aged 32 at the time, got $3.75 million out of this sale? His brother-in-law, Ziya İlgen, who is a retired teacher, and his brother, Mustafa Erdoğan, who was shipfitter until Erdoğan became Istanbul’s mayor in 1994, also got $3.75 million each.

What was the secret to their success?

0211. tower of refuge, douglas bay (undated). pellethepoet / flickr (cc by)

In April 2006, the five men in Erdoğan’s close circle founded “Bumerz Denizcilik” (Bumerz Shipping, formerly Turkuaz) in Istanbul with capital of 1 million Turkish lira (about $700,000 at the time), according to Turkish company registry. The name comes from Erdoğan’s son Burak, brother Mustafa Erdoğan and brother-in-law Ziya, who held 25 percent of the shares each. The remaining shares were owned by Burak’s father-in-law, Osman Ketenci, and Erdoğan’s then private executive assistant, Mustafa Gündoğan, with 15 percent and 10 percent, respectively.

The distribution of $15 million from Bellway Limited in the 2011 bank receipts corresponds to this shareholder structure of Bumerz Denizcilik. But that leads to the next question: How could Bumerz be worth 21 times more five years later?

The answer is in Malta.

Two years after Bumerz Denizcilik was founded in Turkey, Erdoğan’s brother-in-law Ziya İlgen registered the family’s first known offshore company “Bumerz Limited” in the Isle of Man. A year later, Bumerz Limited received all shares of “Pal Shipping Trader One Co Ltd” in Malta, the last of the Erdoğans’ publicly known offshore companies. With this purchase, they obtained an oil tanker called Agdash, and also secured a $18.4 million loan from Parex Bank in Latvia (later, Citadele).

The loan deed was signed by İlgen, as the director of Bumerz Limited and as the owner of Pal Shipping Trader One, in the presence of Azerbaijani businessman Mubariz Mansimov, with the seal of Azerbaijan’s consulate in Istanbul (see pages 7 and 26).

According to the research by The Black Sea on Malta’s registry of companies, the Erdoğans never paid a penny for the Agdash, a ship worth $25 million. Instead, it was Mansimov who operated it and paid off the loan.

So, the 2011 sale of the Erdoğans’ family company in Turkey, Bumerz Denizcilik, to Sıdkı Ayan, an oil tycoon with close ties to the government, must be only on paper because İlgen kept signing Malta company records on Agdash well until February 2015, hiding behind three offshore companies in two tax havens.

Ayan’s ASB Group did not respond to our questions, but his son, Bahaddin Ayan, sent a press release quoted by the Hürriyet newspaper as saying Bellway Limited never received money from Erdoğan’s relatives.

That is exactly the point.

Why did Mansimov and Ayan, two businessmen with interests in Turkish energy deals, keep paying off Erdoğan family loans and sending them money for a ship they never owned?

This is a question that now must be asked by a prosecutor.

We can instead go on by asking why the public broadcaster, TRT, cut off its live feed when Kılıçdaroğlu revealed the Erdoğan family’s offshore deals; and why Turkey’s internet authority blocks access to news articles on corruption.

We should ponder why even private Turkish news channels, such as NTV, CNNTurk and HaberTurk, cut their live broadcasts when a CHP deputy began to share the documents at a press conference.

We must also get very worried when a group of journalists invited to a TV debate on CNNTurk to discuss Erdoğans’ business affairs, instead produced conspiracy theories about how “foreign intelligence services” are feeding these documents to Kılıçdaroğlu to “create chaos in Turkey”.

They could instead pay £15 to the Isle of Man company registry service and answer the title question for themselves.

What business does Erdoğan’s family have in tax havens?


Documents

The following documents contain public sector information licensed under the Isle of Man Open Government Licence, by the consent of Malta Registry of Companies, and information provided by the Turkish Trade Registry Gazette in the public domain.

You can view and download all documents listed below by clicking here (Erdoğan Offshore folder on Google Drive).


Bellway Limited, Isle of Man Companies Registry

Bellway Limited, Isle of Man Companies Registry

IMMA Memorandum Of Association 1 Aug 2011

IMAA Articles Of Association 1 Aug 2011

IMINC Incorporation Certificate 1 Aug 2011

IMAR Annual Return 31 Aug 2012

IMAR Annual Return 1 Aug 2013

IMAR Annual Return 29 Aug 2014

IMAR Annual Return 7 Aug 2015

IMAR Annual Return 1 Sep 2016

IMAR Annual Return 2 Aug 2017

IM06 Intended Resignation Of Registered Agent 15 Aug 2017

IM07 Resignation Of Registered Agent 4 Oct 2017


Bumerz Limited, Isle of Man Companies Registry

Bumerz Limited, Isle of Man Companies Registry

IM07 Resignation Of Registered Agent 4 Oct 2017

IM06 Intended Resignation Of Registered Agent 15 Aug 2017

IMAR Annual Return 8 Mar 2017

IMAR Annual Return 8 Mar 2016

IMAR Annual Return 26 Mar 2015

IMAR Annual Return 14 Mar 2014

IMAR Annual Return 28 Mar 2013

IMAR Annual Return 19 Mar 2012

IMAR Annual Return 5 Apr 2011

IM05 Change Of Registered Agent 29 Mar 2011

IM04 Change Of Registered Office 8 Mar 2011

IMCHG2 Vary Charge Certificate 4 Jan 2011

IM17 Particulars Of Variation In Charge 4 Jan 2011

IMAR Annual Return 31 Mar 2010

IM16 Particulars Of Charge 25 Jun 2009

IMCHG1 Charge Certificate 25 Jun 2009

IMCHG1 Charge Certificate 22 Jun 2009

IM16 Particulars Of Charge 22 Jun 2009

IMAR Annual Return 16 Mar 2009

IM18 Particulars Of Charge Filed Late 15 Jan 2009

IM18 Particulars Of Charge Filed Late 15 Jan 2009

IMCHG3 Late Charge Certificate 15 Jan 2009

IMCHG3 Late Charge Certificate 15 Jan 2009

IM21 Re-Registration Of 1931 Act Company Application 16 Oct 2008

IMAA Articles Of Association 16 Oct 2008

IMREG2 Re-Reg Cert 31 Coy As Nmv 16 Oct 2008

IMMA Memorandum Of Association 16 Oct 2008


Pal Shipping Trader One Co. Ltd, Malta Registry of Companies (previews)

Pal Shipping Trader One Co. Ltd (shareholders), Malta Registry of Companies
Pal Shipping Trader One Co. Ltd, Malta Registry of Companies

Aug 17, 2017 Annual Return

Dec 07, 2015 Termination of a Pledge of Securities

Apr 10, 2015 Annual Return

Feb 25, 2015 Notification of changes amongst directors or company secretary or in the representation of a company

Jul 04, 2014 Annual Return

Apr 10, 2013 Annual Return

Apr 11, 2012 Annual Return

Jun 01, 2011 Annual Return

Mar 22, 2011 Pledging of Securities

Mar 04, 2011 Pledging of Securities

Mar 04, 2011 Termination of a Pledge of Securities

Feb 21, 2011 Annual Return

Feb 21, 2011 Annual Return

Jan 14, 2009 Updated Memorandum & Articles of Association

Jan 14, 2009 Change in Registered Office

Oct 29, 2008 Notification of changes amongst directors or company secretary or in the representation of a company

Oct 29, 2008 Pledging of Securities

Oct 29, 2008 Transfer/Transmission of Shares

Oct 29, 2008 Termination of a Pledge of Securities

Apr 14, 2008 Annual Return

Oct 25, 2007 Pledging of Securities

Oct 25, 2007 Unregistered Documents

Mar 16, 2007 Unregistered Documents

Mar 16, 2007 Memorandum and Articles of Association

Mar 16, 2007 Unregistered Documents


Bumerz Denizcilik ve Ticaret Anonim Şirketi, Turkish Trade Registry Gazette

Bumerz Shipping, Turkish Trade Registry Gazette

11/07/2016 issue: 9112 page: 615

01/06/2015 issue: 8831 page: 549

29/05/2015 issue: 8830 page: 316

31/03/2015 issue: 8790 page: 476

27/08/2014 issue: 8640 page: 390

08/10/2012 issue: 8169 page: 519

23/02/2012 issue: 8012 page: 524

30/12/2011 issue: 7973 page: 584

31/01/2011 issue: 7741 page: 358

13/09/2010 issue: 7646 page: 432

09/03/2010 issue: 7517 page: 365

20/05/2009 issue: 7314 page: 301

22/02/2007 issue: 6751 page: 502

18/08/2006 issue: 6624 page: 274

14/04/2006 issue: 6535 pages: 531 & 532


I would like to thank Craig Shaw who wrote the original #MaltaFiles stories over Erdoğans in collaboration with European Investigative Collaborations (EIC Network) researchers.