Are Maltese courts being used to settle Turkey’s political games?

The Maltese courts will decide on the case of Mubariz Mansimov Gurbanoğlu, an Azerbaijani-Turkish citizen and the founder of the Palmali Group of Companies, a shipping conglomerate comprising some 56 entities based in Malta.

He stands accused of defaulting on a loan from a Russian bank, Sberbank. The bank had made a number of loans to Palmali companies based in Russia, on the basis that the guarantors were “steady and substantial”. The loans were secured via personal guarantee by Gurbanoğlu, his Turkish companies, and 47 naval boats registered in Russia.

There was a default on the loan and the full balance was never repaid. Sberbank then sought precautionary warrants from the Maltese courts and seized shares owned by Palmali. In 2018, the bank initiated arbitration proceedings in London as well.

He is also accused of transferring shares from companies to other subsidiaries in Turkey as a way of minimising his liabilities.

Palami has argued that courts in Malta have no jurisdiction to hear the case and he denies any allegations of fraud. He submitted an affidavit to the court, stating that neither he nor the Turkish companies had agreed to be subjected to Maltese law and that it was done in contravention of an agreement stating the UK would be the jurisdiction for any proceedings.

Meanwhile, he was arrested in Turkey on terrorism charges due to allegations he is a member of the Gulen Movement, which President Recep Tayyip Erdoğan claims is responsible for the failed 2016 coup d’etat attempt. He was cleared of the charges and then rearrested in March 2020 and his assets were seized.

Gurbanoğlu had previously been close to Erdoğan, along with many other wealthy industrialists. But since the failed coup, thousands of alleged Gulenists have been imprisoned, prosecuted and persecuted.

Fethullah Gulen is a Turkish scholar, Islamic preacher, and the de facto leader of the Gulen Movement. A civil society organisation, they were once aligned with Erdoğan’s government but since the failed 2016 coup, they have fallen out of favour, Fethullah exiled himself to the US, and its members have been hunted down internationally by the Turkish state.

Only Turkey, Pakistan, and the Gulf Cooperation Council Organisation of Islamic Cooperation consider the Gulen Movement a terrorist organisation.

But what makes this interesting, especially in the context of the case being held in Malta, is the additional dispute that Gurbanoğlu has with Azerbaijan’s State oil company SOCAR, and the fact he has issues with the Turkish government.

Gurbanoğlu claims that his arrest in Turkey is due to a conspiracy between SOCAR and Russian energy giant Lukoil. In a letter sent to Erdoğan, he claims the two companies are working against him and had “bribed many judicial authorities in Turkey and issued instructions to get me jailed, to inflict ruin on me and my companies and to take them over”.

SOCAR denied the claims and said it supports “the effectiveness of the Turkish justice system and unequivocally rejects the possibility of interference in judicial protest”.

Gurbanoğlu then claimed that SOCAR President Rovnag Adbullayev had bribed some of his employees to give false testimony against him.

Kemal Kılıçdaroğlu, of Turkey’s main opposition Party CHP, told parliament about the existence of a “FETO market.” FETO (Fethullah Terrorist Organisation) is the name given to the Gulen Movement by Erdoğan. This market is allegedly run by “rogue policemen and prosecutors” who falsely charge and detain powerful individuals with allegations of terrorism and elicit large bribes from them in return for their freedom.

Then, in the US State Department report on human rights for 2020, it was noted that “the government engaged in a worldwide effort to apprehend suspected members of the Gulen movement. There were credible reports that the government exerted bilateral pressure on other countries aimed at having them take adverse action against specific individuals, at times without due process.”

Forms of pressure include illegal extraditions, and the use of INTERPOL Red Notices to target specific individuals.

This was in addition to attempts by the Turkish government to freeze the assets of 80 Turkish citizens that it claims were linked to Gulen in Germany. The German authorities refused, saying there were no grounds for the freezing of their assets.

Turkey has also been accused of pressuring countries to ignore the legal process and deport alleged ‘Gulenists’ back to the country, where they are swiftly imprisoned. Azerbaijan is one of the countries that comply with forced disappearances following the signing of a bilateral security cooperation agreement.

In 2018, Turkish citizen Mustafa Ceyhan was remanded in custody after entering the country with invalid documents. The court ruled he would not be deported but he was then abducted in front of the courthouse by Azerbaijani and Turkish intelligence services and then tortured and deported. Similar stories were reported in Albania, Kosovo, and Bosnia, and Herzegovina.

In Albania, a country that also has a bilateral agreement, the authorities have accused an allegedly Gulen-linked school of money laundering and raided the campus without a court order at the end of 2020. No evidence was provided and the school submitted to an external audit that found no wrongdoing.

Malta has a long-standing relationship with Turkey and has been party to many instances of joint cooperation in the fields of defence, security, trade, and maritime.

In 2019, SOCAR and Sberbank created a joint venture for oil refining in Azerbaijan. Sberbank and Lukoil, who Gurbanoğlu has accused of conspiring against him, are “long-standing strategic partners” with multiple shared business interests. Both Azerbaijan and SOCAR have complex relationships with Malta.

Azerbaijan has long been accused of propagating a $2.9 billion money laundering and lobbying scheme in European countries. This money that was used to launder reputations, buy favour, and bribe European politicians, partly facilitated by Malta and the now-defunct Pilatus Bank. This was the same bank that made the transfer to 17 Black, owned by the man accused of ordering the assassination of Daphne Caruana Galizia and involved in the Electorgas consortium with SOCAR.

Disgraced ex-Prime Minister Joseph Muscat’s chief of staff Keith Schembri, charged with money laundering, also had an account at Pilatus along with several Azerbaijani PEPs.

The Electrogas contract saw Maltese taxpayers paying over the market rate for LNG and pocketing the profit. The “Security of Supply Agreement” was signed by disgraced former Minister Konrad Mizzi and SOCAR in 2015.

Yesterday, a federal court in Switzerland blocked an attempt by SOCAR to keep their banking information away from a Latvian police investigation.

Latvian authorities are looking into a number of suspicious money movements that they’ve linked to the very same agreement. The Maltese government went to great lengths to hide the agreement from the European Commission and any requests for it, even in parliament have been ignored.