HOTLINE INVESTIGATIONS UWO Unexplained Wealth Orders

The Unexplained Wealth Order legislation and London’s financial aristocracy

Pin it

Zamira Hajiyeva, the wife of for­mer Azerbaijani state banker Jahangir Hajiyev, is the first per­son to be inves­ti­gat­ed by Britain’s National Crime Agency (NCA) under an Unexplained Wealth Order (UWO).

Jahangir Hajiyev is cur­rent­ly serv­ing a 15-year prison sen­tence in Azerbaijan for a mas­sive fraud oper­a­tion involv­ing the embez­zle­ment of tens of mil­lions of pounds from the country’s International Bank. Zamira is being inves­ti­gat­ed by the UK finan­cial author­i­ties on the sus­pi­cion that she enjoyed an extrav­a­gant life in London on the pro­ceeds of his crimes.

In 2009, a com­pa­ny based in the British Virgin Islands—traced back to the own­er­ship of Hajiyev and his wife—bought an £11.5 mil­lion home in Knightsbridge. The five-bed­room prop­er­ty is cur­rent­ly worth around £15 mil­lion. It is con­ve­nient­ly locat­ed with­in min­utes of the lux­u­ry Harrods depart­ment store, where Hajiyeva spent £16 mil­lion across 35 cred­it cards in 10 years—nearly £4,500 a day. Her oth­er known pur­chas­es include more than £10 mil­lion buy­ing the Mill Ride Golf Club estate in Berkshire and £31 mil­lion (£42 mil­lion in today’s mon­ey) on a pri­vate jet. These stand to be seized if Hajiyeva can­not pro­vide an account of how she law­ful­ly acquired the mon­ey to pur­chase them.

As with all such moves against cor­rup­tion by the rul­ing elite, an individual—and a very easy tar­get in this case—is being used to dis­tract from the untold bil­lions of pounds worth of crim­i­nal wealth that has been allowed, and encour­aged by suc­ces­sive gov­ern­ments, to find a com­fort­able home in the cap­i­tal. The tim­ing of the intro­duc­tion of UWOs into leg­is­la­tion this January was not acci­den­tal. They were intro­duced as part of the British rul­ing elite’s ever more hys­ter­i­cal anti-Russia cam­paign. Although a UWO has not yet been lev­elled against a Russian, the leg­is­la­tion is also designed to give the gov­ern­ment lever­age over influ­en­tial Russian oli­garchs pos­sess­ing UK invest­ments.

UK gov­ern­ment manoeu­vres against one or two, or even one group of for­eign-born oli­garchs are utter­ly hyp­o­crit­i­cal. They will not in any way alter London’s sta­tus as a play­ground for the super-rich and haven for ille­gal wealth. In fact, the city has pro­vid­ed a safe retreat espe­cial­ly for those who made their for­tunes plun­der­ing the state assets of the for­mer Soviet Union and Eastern Europe.

Following the dis­so­lu­tion of the Soviet Union in the ear­ly 1990s, the UK opened its arms wide to the new­ly mint­ed elite, fab­u­lous­ly enriched by their asset strip­ping of the for­mer Soviet republics. In 1992 only one Russian was grant­ed British cit­i­zen­ship, but by 2002 the num­ber had grown to 806. This was such a phe­nom­e­non that London became known as “Moscow on Thames” or “Little Moscow” to this group, who enjoyed the effu­sive sup­port of the British estab­lish­ment. In 2015, the BBC aired a doc­u­men­tary, “Rich, Russian and Living in London,” detail­ing the stag­ger­ing lev­els of wealth and spend­ing of this tiny lay­er.

The same process took place as China was opened up as a cap­i­tal­ist mar­ket, and Chinese mil­lion­aires and bil­lion­aires over­took their Russian coun­ter­parts as the main group apply­ing for UK res­i­den­cy and cit­i­zen­ship.

Hajiyeva is a prime exam­ple of this process. She was giv­en per­mis­sion to live in the UK under a Tier 1 investor visa—better known as a “gold­en visa.” Individuals are grant­ed res­i­den­cy in return for invest­ing £2 mil­lion in UK bonds or shares and are then eli­gi­ble for indef­i­nite leave to remain or full cit­i­zen­ship after five years. The five years are cut to three for an invest­ment of £5 mil­lion and two for £10 mil­lion.

More than 3,000 visas were grant­ed under this scheme since it was set up in 2008, 60 per­cent of them to Chinese and Russian nation­als. Between March 2017 and March 2018, the num­ber of appli­ca­tions increased 46 per­cent over the pre­vi­ous year.

Multiple watch­dogs have point­ed to the visas and the res­i­den­cy they lead to as sim­ply tools for laun­der­ing shady or ille­gal wealth.

Hayijeva’s case echoes that of Madiyar Ablyazov a few years ago. He was grant­ed a Tier 1 visa in 2009 and giv­en indef­i­nite leave to remain in 2013 on the basis of UK invest­ments made by his father, Mukhtar Ablyazov. The pair owned Carlton House locat­ed on the pres­ti­gious The Bishops Avenue. Some of the prop­er­ties on the street go for up to £65 mil­lion. The house is equipped with sev­en bed­rooms, an indoor swim­ming pool com­plex and a 10-per­son Turkish bath. Mukhtar was, from 2009, inves­ti­gat­ed for and charged with car­ry­ing out a mas­sive, multi­bil­lion-pound fraud against the BTA bank in Kazakhstan and has been on the run ever since.

The vast major­i­ty of such crimes nev­er see the light of day, let alone ever reach tri­al. The National Crime Agency esti­mat­ed that as much as £90 bil­lion is laun­dered through the UK econ­o­my each year, with the vast bulk of it through London. In 2015, the cap­i­tal was named the mon­ey-laun­der­ing cen­tre of the world’s drug trade by an inter­na­tion­al crime expert.

The case of Jahangir Hajiyev and Zamira Hajiyeva must be put in prop­er per­spec­tive. The media focus on their case is aimed at obscur­ing the main issues. The fact is, the likes of Hajiyeva and Ablyazov par­tic­i­pat­ed as mem­bers of a super-rich milieu, char­ac­terised by grotesque deca­dence, and are dis­tin­guished only by the fact that they were born in anoth­er coun­try.

Honoré de Balzac observed in 1835 that the “secret of great for­tunes with­out appar­ent cause is a crime for­got­ten, for it was prop­er­ly done.” Never was this truer than today. In the lux­u­ry shops and restau­rants of cen­tral London, Hajiyeva could rub shoul­ders with the likes of Sir Philip Green—whose bil­lion­aire for­tune was buoyed by raid­ing his retail work­ers’ pen­sion fund —and Mike Ashley— anoth­er bil­lion­aire, who was made rich from the super-exploita­tion of thou­sands of Sports Direct work­ers.

Hajiyeva’s lawyer, James Lewis QC, per­haps revealed more than he intend­ed when he defend­ed his client’s enor­mous wealth by describ­ing her hus­band as not mere­ly a mod­est­ly paid banker but a stereo­typ­i­cal “fat cat inter­na­tion­al banker” who could eas­i­ly afford such extrav­a­gances. In oth­er words, the lifestyle of a major fraud­ster is com­pa­ra­ble to that afford­ed to any num­ber of inter­na­tion­al oli­garchs and finan­cial swindlers. In fact, as proved by the Hajiyev case, they are rel­a­tive­ly small fry in com­par­i­son with their British and inter­na­tion­al coun­ter­parts.

If unex­plained wealth leg­is­la­tion was to be seri­ous­ly focussed where it should be, it would need to be aimed against the cap­i­tal­ist elite of Britain and every nation­al­i­ty. What about the “unex­plained wealth” that is hid­den by the British finan­cial aris­toc­ra­cy in tax havens such as Panama, as exposed in the Panama Papers rev­e­la­tions, or in Jersey where an esti­mat­ed £1.2 tril­lion of wealth was being hoard­ed, in large part due to its zero cor­po­rate tax rate? What about the unex­plained wealth hid­den in the British Virgin Islands—that in 2012 was the fifth largest recip­i­ent of for­eign direct invest­ment glob­al­ly with inflows at $72 bil­lion?

There are around 4,900 “ultra-high-net-worth” indi­vid­u­als, with assets of over £21 mil­lion, based in London. Their num­ber has climbed by 28 per­cent in the last decade. The cap­i­tal is home to 86 bil­lion­aires, whose extrav­a­gances make Hajiyeva’s Harrods shop­ping bill appear as loose change. Her £15 mil­lion house is a tenth of the val­ue of One Hyde Park, which was pur­chased ear­li­er this month by prop­er­ty tycoon Nick Candy—becoming the most expen­sive prop­er­ty ever to be sold in London. Other pent­hous­es in One Hyde Park have pre­vi­ous­ly gone for £140 mil­lion and pri­or to that £137 mil­lion for a triple-storey pent­house sold to Ukrainian bil­lion­aire Rinat Akhmetov.

Not con­tent with the best res­i­dences mon­ey can buy, London’s finan­cial oli­garchy now fre­quent­ly reside in and are com­mis­sion­ing so-called “ice­berg homes,” where liv­ing space is expand­ed through mas­sive­ly expen­sive under­ground exten­sions. More than 4,650 base­ment builds were grant­ed plan­ning per­mis­sion in the rich­er London bor­oughs between 2008 and 2017. These plans include, accord­ing to the Guardian, “at least 376 swim­ming pools, 456 cin­e­mas, 996 gyms, 381 wine stores and cel­lars, 340 games and recre­ation rooms, 241 saunas or steam rooms, 115 staff quar­ters, includ­ing bed­rooms for nan­nies and au pairs, 65 garages, 40 libraries, two gun stores, a car muse­um, a ban­quet hall and an arti­fi­cial beach.”

In every sense, such vast squan­der­ing of wealth for the plea­sures of a sat­ed few—made pos­si­ble by all man­ner of crim­i­nal­i­ty, stock mar­ket spec­u­la­tion and immense exploita­tion of the work­ing class—in the con­text of a pop­u­la­tion suf­fer­ing rock­et­ing lev­els of pover­ty, home­less­ness and hunger—is just as obscene as any­thing done by Hajiyeva and her spouse.

By Thomas Scripps

The Unexplained Wealth Order leg­is­la­tion and London’s finan­cial aris­toc­ra­cy

Tagged under:

Log In or Create an account