Our Analytics 21 may — 13:25

Handicraft oligarchs evade taxes and earn 30 million a year! (Article two)



Following the first investigative article on the rise and fall of the Zulfugarli oligarchic family threatening the Azerbaijani authorities with a bloody riot of workers at the Bakı İnşaat Sənayəsi plant, the chairman of the board of the production association, Ramiz Ahmedov, issued a new radical statement about the determination to continue the struggle. A special statement of the representative of the oligarchic family was spread on the network and the media by herbivorous limited editions...

The question is: struggle for what? For wretched handicraft metallurgical production, while avoiding taxation and customs duties? We will return to customs duties. And now pay attention to the mechanism, which the impious brothers were able to create, bringing to their family treasury astronomical profits. Notice, this mechanism is for the production of the most popular in the market, but at the same time, perhaps, the most substandard product in the world. It is difficult to imagine that such product can be manufactured even in Central African countries.

Leader of the clan - Nureddin Zulfugarli

Second in charge - Logman Zulfugarli

Zulfugarli brothers recreated a systemic illicit and illegal business in Azerbaijan. And for today this illegal network covers four underground shops. In the first article we stopped our attention at the enterprise Bakı İnşaat Sənayesi, in which they produce reinforcement bars, channels, angles, as well as round and square steel shapes.

Recall, that according to the verdict of the Supreme Court of Azerbaijan, Zulfugarli brothers unlawfully seized a technological line consisting of ten units of overall equipment and mercilessly exploited it for four years. Only at the cost of enormous efforts, after the intervention of the courts, the true owners of valuable equipment finally returned their property. After the audit of the court executors last week, dismantling and removal of the production structure began. And the brothers and their lawyers at court hearings assured the high court that a complex and expensive technological line had long been dismantled and destroyed!

Another fact requires careful verification. If the factory officially hid the presence of a technological line, how was its work formalized and whether it was formalized at all? After all, if there is no line, then by simple logic it can't produce products. But the line, as already noted, worked, bringing the company revenues. It is easy to assume that the reinforcement bars and channel bars produced here could simply be unaccounted without paying the relevant taxes to the budget.

And the production of blasphemous low-quality products of square steel shapes at the enterprise is an unprecedented innovation in the metallurgical industry of the modern world. Square and round steel shapes used in structural construction work are made at these shops from ordinary metal sheets.

Analyzing the activities of the brothers at three other workshops, you are horrified by the potential danger that threatens all residents of Azerbaijan. After all, this handicraft product is used in the construction of new residential buildings and state enterprises, as well as repair work. This is an immediate threat to public security, with the connivance of the relevant authorities!

Handicraft shop No.1

Handicraft shop No.2

Handicraft shop No.3

The workshop, owned by the brothers in Khirdalan (not far from the Bakı Poladtökmə factory) is engaged in the production of reinforcement bars. The bars and rolled wire (a viscous metal material) in this shop are made of railway rails! The brothers buy about 10-15 thousand tons of rails per year from the LLC Railway Management. From it they produce handicraft products. After all, according to the canons of metallurgy, the production of reinforcement is a complex technological process. The scrap must be delivered to a special electric arc furnace. After all, smelting is the most dramatic stage of production. The space of the furnace must be limited to a domed vault, a spherical hearth and walls from the sides. And inside the furnace special electrodes must be lowered...

With full responsibility and confidence, we can say that these significant technological requirements are not observed in this shop. Moreover, metallurgical enterprises are strongly advised not to weld, but to bind the rods together. And at Zulfugarli enterprise, in order to reduce the cost of production, the rods are welded! After all, we are talking about the core and hot-rolled variety! This is criminal negligence for profit, because the material should be made of low-alloy and carbonaceous metals.

But Zulfugarlis' greed knows no boundaries, for the sake of profit they are ready to endanger the life of the whole country. The brothers buy up 1 metric ton of rails for AZN 350 in the railway administration, then they are rolled through homemade shafts and immediately delivered to the market for 880 manats per 1 ton. Trully handicraft production, because the market is supplied with defective products. With a close inspection of the rolled wire produced in this shop, it is not difficult to notice burrs and imperfections on the material produced. And on the surface protrude bubbles. Poor quality due to improper heating of the material. But for the brothers, the main thing is not quality, but profit.

According to my calculations, the net profit of the handicraft oligarchs for the year is 30 million manats. Immediately there is a fair question - how many taxes did Zulfugarlis pay to the state treasury? You won't believe it. Only 1 million 100 thousand manats. And this includes VAT, profit tax, income tax and all other deductions! I leave aside the issue of substandard, if not criminal, products, there is direct evasion from taxes.

Handicraft oligarchs produce about 40 thousand of such defective products a year. Where does this reinforcement goes? Whose houses and offices will not survive the housing-operational period? These questions are not of interest to the brothers. The main thing is money that does not smell. That's why in only four months in 2018, about 500,000 metric tons of metallurgical products were imported to Azerbaijan from foreign countries, primarily from Russia and Ukraine, worth $352 million. Because of such crooks as Zulfugarli and their handicraft production the domestic market lost confidence in the local producer. That is why reinforcement of Ukrainian and Russian production is in high demand. And this happens at a time when the top political leadership calls for diversifying the economy and increasing the growth of the non-oil sector, primarily heavy industry.

Handicraft brothers are not interested in increasing production capacity and product quality. What for? There are no motives. After all, the self-made underground production, which allows you to get away from taxes, brings astronomical profits. Just imagine, 30 million manats a year! In addition, unskilled workers in these underground shops receive a salary of up to 400-500 manats a month (they receive salaries from the black accounting department, so they do not pay taxes). And this is with an average salary in the country at 528 manat, and in the sphere of metallurgy about 1500 manats.

And all the profits of the brothers flow to Turkey for the implementation of mega-building projects. Here is the attitude of the citizen to his own country. Hence, in Baku, he produces low-quality products, pays pennies to workers in dirty feudal shops, jeopardizes the lives of fellow citizens, evades taxes, tears off a fabulous payback and takes capital abroad. What for? In order to purchase from the Turks quality reinforcement, to build quality housing for the Turks and thereby get a double profit from the Azerbaijanis! And all this happens with passive observation of responsible state structures! How so?

And we will explain why this happened in this way. In the last publication, I asked myself the immediate question - who saved and took under the wing the Zulfugarli brothers, who had taken an active part in the attempt of the coup d'etat in the fall of 2005?

In 2005, Zulfugarli were arrested by officers of the Ministry of Internal Affairs. Then they fled shamefully from the country. But three years later they again returned to Baku to create clandestine and criminal production with the help of the closest associates of the former head of the Ministry of National Security Eldar Mahmudov. Handicraft brothers were taken under his direct guardianship by special agent of Eldar Mahmudov, known by the nickname "Akif the Shark" - Akif Mustafayev. It was using the patronage of his boss that the special agent provided indulgence to the financiers of the coup d'état, was given the go-ahead for their return to the country and the creation of a network of underground shops. According to information from competent sources, the Zulfugarli brothers paid compensation, and then they started paying the monthly share to Akif Mustafayev. After the natural collapse of Eldar Mahmudov with the whole of his ministry, the "Shark" fled to Spain. There he was detained, but strangely again he was at large. Currently, the "Shark" is hiding in France.

"Akif the Shark"

It was Eldar Mahmudov who helped Zulfugarli brothers to get their share in the Khazar Bor pipe factory. Until the orange autumn, the handicraft brothers owned 95 percent of the company's shares. And the new owner of the plant had to pay to the brothers in 2012 15 million dollars. And this money went to Turkey.

After the fall of Eldar Mahmudov, to consolidate their own position Zulfugarli brothers joined the political alliance with the clan of the shipping oligarch, Mubariz Mansimov. The son of Logman Zulfugarli - a Turkish dandy Ramin Zulfugarli married Mansimov's niece. All Turkish media in rapturous tones and bright colors described one of the most expensive weddings in the history of modern Turkey. Two families joined their bonds, forming the most powerful political clan. However, a fatal failure has ruined the fate of the brothers. The evil fate again turned against Zulfugarli. Tankers of Mansimov, who delivered oil to Islamic terrorists in the Persian Gulf, went to the bottom. Mansimov went bankrupt, entered into a private war with the Russian and Azerbaijani authorities, found himself under an exorbitant burden of credit obligations... And the brothers, this time at random, rushed to Baku. And this time in the political elite of the country there were new patrons of Zulfugarli. It is quite possible and permissible that the story of criminal negligence and tax evasion became a complete surprise for officials being ignorant of the subtleties of the iron and steel industry. And they look with horror at the new flight of the brothers from Azerbaijan. After all, the brothers soiled their reputation. A peremptory cry can follow: with whom did you link the future of Azerbaijan's heavy industry?

Zulfugarli clan and Mansimov clan united in a single union

Imagine, it turns out that in 2017 the owners of handicraft shops managed to acquire a special status of investors in the Ministry of Economy, which are granted tax and customs privileges. Investments? What kind of investments? And what did the brothers invest in dirty antediluvian medieval shops with the feudal exploitation of human labor? We will talk about this in our next publication...


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