DUSHANBE, June 16, 2014, Asia-Plus – An Article “Russian Aluminum Giant Pries Open Books at Tajikistan’s Largest Factory” that was posted on EurasiaNet.org on June 9 notes that the documents – handed over to Russia’s Rusal by order of a New York federal court earlier this year – seem to indicate that almost $100 million of the Tajik aluminum smelter’s revenues went to buy two Boeing 737s to start a private airline reportedly controlled by the president’s brother-in-law.

Around the time of the purchase, Tajikistan was coercing its citizens to make monthly contributions for the Roghun hydroelectricity project that the state needs, essentially, to sate the Tajik Aluminum Company (TALCO)’s appetite for electricity.

The state-mandated fundraiser for construction of the Roghun dam took place in 2010, forcing many Tajiks – including teachers, who made about $30 to $40 per month at the time – to hand over half their salaries for several months. The effort raised some $180 million before foreign donors warned that it was increasing hunger and threatening recession.

The money for the two planes – over $96 million, according to Deutsche Bank records shown to EurasiaNet.org by Rusal representatives – was paid between July 2008 and November 2010 out of a bank account belonging to CDH Investments Corporation.  CDH, registered in the British Virgin Islands, acted until 2007 as the aluminum factory’s middleman and beneficiary, buying raw materials for the plant and selling its aluminum output at a hefty profit.

The article notes that most of the Boeing payments are marked “for Somon Air,” Tajikistan’s first privately owned airline, which holds the best slots at Dushanbe International Airport and has largely squeezed out state-run carrier Tajik Air.  Matched with data from Planespotters.net, serial numbers used in the bank transfers identify the 737-800s as still belonging to Somon Air.

Somon Air reportedly did not respond to multiple requests for comment on its acquisition of the planes, or about its ownership structure.

Both Somon Air and CDH, as well as the private bank that made the plane payments on CDH’s behalf, have been linked to one man: President Emomali Rahmon’s brother-in-law Hasan Asadullozoda.  As chairman of Orienbank, where CDH kept its money, Asadullozoda told the London High Court in 2008 that he controlled CDH and planned to invest its profits in "transport infrastructure" and tourism.  Multiple US Embassy cables leaked by the anti-secrecy organization Wikileaks identify him as either owning or controlling Somon Air.

The article says that in a September 2009 cable, then US Ambassador Kenneth Gross wrote that Asadullozoda’s Orienbank owns the airline, which is “controlled by the president” and operated by Asadullozoda.  Requests for a response emailed to Orienbank have reportedly gone unanswered.

According to the article, TALCO’s chief information officer, Igor Sattarov, confirmed that CDH had bought Boeings for Somon Air at the government’s behest and invested its profits into other state “social programs.”  He dubbed the airline “Tajikistan’s calling card.”

Sattarov called suggestions that TALCO revenues were funneled into the private airline “absurd,” saying there was no formal relationship between Talco and CDH at the time; CDH had provided its services to TALCO’s predecessor, TadAZ, before the plant changed its name in 2007.  Nonetheless, in its January ruling, the US federal court considered the entities sufficiently closely linked to grant Rusal access to CDH’s bank records.

Today, attorneys for Rusal are combing those records to identify funds and property it can seize in lieu of a debt that the company maintains is over $360 million.  “I’m waiting for the treasure map,” said a source close to Rusal, who also said the company is working on a legal case to take possession of the 737s.

The relationship between Rusal, its predecessors, and the Tajik aluminum plant stretches back to the 1990s, interweaving the two enterprises’ commercial interests with their ties to political elites in their respective countries.

After Rusal pulled out of Tajikistan in 2007, its subsidiaries Hamer Investing Ltd and Aluminum and Bauxite Company (Albaco) began arbitration in Switzerland, culminating last October with two wins.  A Swiss tribunal ordered Talco to pay Hamer $275 million related to broken supply contracts dating back 10 years.  Later, a court in the British Virgin Islands held up an older Swiss award for $70 million to Albaco.  With interest as set by the courts accruing at nearly $45,000 per day, a Rusal spokesperson said, the company calculates Talco’s debt to its subsidiaries as of May 20 at $363 million.

TALCO rejects the foreign court rulings, insisting the cases be heard in a Tajik court.  The company says it has documentary evidence proving Rusal was using criminal schemes to bankrupt the Tajik plant and thereby eliminate a competitor.  Rusal dismisses the accusations, pointing out that the Swiss tribunal rejected Talco’s $400 million counterclaim.