Early impacts of public beneficial ownership registers: United Kingdom
Case Study: Linking politically exposed persons to UK assets
The UK is one of the few countries that has a legal mechanism to target illicit enrichment – the Unexplained Wealth Order (UWO) – which can enable the seizure of unexplained wealth in the UK.[26] In 2018, evidence from open BO data played a key role in enabling the UK National Crime Agency (NCA) to issue the first UWO, which was against a politically exposed person (PEP) from Azerbaijan who owned real estate in the UK.
Jahangir Hajiyev, former chairman of the state-owned International Bank of Azerbaijan, was jailed in 2016 for 15 years for fraud, embezzlement, and misappropriation of public funds. The court found he had taken an estimated USD 9 billion out of the country, equivalent to 25% of Azerbaijan’s gross domestic product (GDP).[27] UK authorities investigated luxury London properties and investments that they suspected were purchased with laundered funds.
One such investment was the purchase of the exclusive Mill Ride Golf Club in Berkshire, which Jahangir Hajiyev’s wife, Zamira Hajiyeva, allegedly purchased for GBP 10.5 million in 2013.[28] The ownership of the golf club involved both a UK company, MRGC Ltd, and an entity incorporated in Guernsey – a jurisdiction that does not yet publish beneficial ownership information. However, the UK’s public BO register was used to show that Zamira Hajiyeva had been a beneficial owner of MRGC Ltd for a single day in August 2016.[29] Her name was subsequently removed.
Transparency International (TI), which analyses UK PSC data to identify suspicious patterns that may indicate corruption, highlighted the value of open BO data in cases like this. Ben Cowdock, TI’s Investigations Lead, said: “In a closed system, it would have been incredibly lucky to find that single day. But in the UK, where beneficial ownership data is open, on the public record, a search can identify the link.”
The PSC register helped investigators link Zamira Hajiyeva to the Mill Road Golf Club, resulting in the first UWO in the UK.[30] After her applications at the High Court and the Court of Appeal were rejected, Zamira Hajiyeva made an application to the Supreme Court to appeal against the UWO made against her by the NCA.[31] In December 2020, the Supreme Court refused this application and required Zamira Hajiyeva to provide the NCA with any information they sought regarding her assets.[32] In the event that Zamira Hajiyeva is unable to explain the source of her wealth, the Supreme Court will seize her GBP 22 million worth of properties, including her Knightsbridge home and the GBP 11 million Berkshire golf course.[33]
"In a closed system, it would have been incredibly lucky to find that single day. But in the UK, where beneficial ownership data is open, on the public record, a search can identify the link" - Ben Cowdock, Investigations Lead, Transparency International
Figure 2. Assets owned indirectly by Zamira Hajiyeva
Sources: This diagram has been compiled from the following public sources to illustrate the complexity in understanding ownership structures based on limited publicly available information: Open Ownership Register; Companies House register; BBC. The information contained in this diagram is compiled on a best efforts basis and is not exhaustive or complete. Aspects of the ownership structure have been left out where the information is not available, not relevant to illustrate the story, or challenging to visually represent. The diagram covers multiple time periods, rather than a snapshot. Not all of the entities and officers shown are still active.
Endnotes
[26] Elnur Mammadov, “Janik alone laundered the entire budget of Azerbaijan”, Haqqin.az, 20 September 2017, https://haqqin.az/oldage/111159; “Enhancing Government Effectiveness and Transparency: The Fight Against Corruption”, World Bank, September 2020, 254, https://openknowledge.worldbank.org/bitstream/handle/10986/34533/Enhancing-Government-Effectiveness-and-Transparency-The-Fight-Against-Corruption.pdf.
[27] Elnur Mammadov, “Janik alone laundered the entire budget of Azerbaijan”, Haqqin.az, 20 September 2017, https://haqqin.az/oldage/111159.
[28] Isabella Perrin, “Zamira Hajiyeva: Mcmafia Ascot golf club owner spends 16 million in Harrods”, Bracknell News, 28 May 2019, https://www.bracknellnews.co.uk/news/17669393.zamira-hajiyeva-mcmafia-ascot-golf-club-owner-spends-16-million-harrods/.
[29] “MRGC 2013 Ltd”, Companies House, n.d., https://find-and-update.company-information.service.gov.uk/company/08633094/persons-with-significant-control.
[30] Shilpa Arora and Steve Smith,Arora, S., et al. (2020), “Unexplained Wealth Orders: Looking Beyond the Headlines”, Association of Certified Anti-Money Laundering Specialists (ACAMS), June 2020, available at http://files.acams.org/pdfs/2020/UWO-White-Paper.pdf.
[31] “Zamira Hajiyeva: Supreme Court rejects appeal to overturn ‘McMafia’ unexplained wealth order”, Sky News, 21 December 2020,https://news.sky.com/story/zamira-hajiyeva-supreme-court-rejects-appeal-to-overturn-mcmafia-unexplained-wealth-order-12169324.
[32] Nicholas Holland, “Supreme Court Rejects Appeal to Overturn UK’s First Unexplained Wealth Order”, The National Law Review, XI: 18, 18 January 2021, https://www.natlawreview.com/article/supreme-court-rejects-appeal-to-overturn-uk-s-first-unexplained-wealth-order.
[33] Rupert Neate “‘McMafia’ banker’s wife will have £22m seized unless she reveals source of wealth”, The Guardian, 21 December 2020, https://www.theguardian.com/law/2020/dec/21/mcmafia-banker-wife-seize-source-wealth-supreme-court-harrods.
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